Sunbird Energy (ASX:SNY) has received the first payment by Vandasia Investments totalling US$3 million as part of Stage 1 of the Vandasia Transaction.
Completion of Stage 1 of the Transaction is due to take place later this week following the final payment of US$2 million from Vandasia.
On receipt of cleared funds totalling USD$5 million, Sunbird will issue 20,367,127 fully paid shares, providing Vandasia with 14.9% of the company.
The capital raising will be at an equivalent of A$0.274 per share and represents a premium of 44.3% to Sunbird's closing share price on 8th September prior to announcement of the transaction.
Stage 2 of the investment, which is subject to shareholder approval and execution of a Gas Sales Term Sheet with a potential customer, includes the issue of an additional 23,021,757 shares to Vandasia for a subscription amount of US$9,350,000.
It also incorporates the purchase and conversion 47.75 million options, which will result in Sunbird receiving an additional US$8,850,000.
Completion of the second stage is due by 30 November 2014 and will provide Vandasia up to a 43.9% interest in Sunbird.
Completion of the full transaction will deliver Sunbird over A$25 million in capital at a weighted average price of AUD$0.34 per share, representing a premium of 80% to Sunbird's closing share price on 8th September.
The transaction will deliver the funding required to advance the Ibhubesi Gas Project to commercialisation and provides Sunbird with a capable strategic shareholder with extensive industry experience in Africa.
The investment by Vandasia demonstrates the value proposition of the Ibhubesi Gas Project and the advanced nature of Sunbird’s gas supply negotiations.
Sunbird holds a 76% interest in Ibhubesi Gas Project which is the largest undeveloped gas discovery in South Africa, with 540 billion cubic feet of Proved and Probable Reserves.
The block is located just 380 kilometre north west of Cape Town and 70 kilometres from the coast.
The Ibhubesi Gas Project has multiple development opportunities to supply the high value South African energy market including ongoing gas sales negotiations with Eskom for the provision of gas to the existing Ankerlig Power Station, Independent Power Producers and major industrial users.
Sunbird also has a portfolio of five Coal Bed Methane projects covering 10,070 square kilometres of prospective coal basins in South Africa and Botswana.
The company also controls 74% of a 644 Bcf 2C gas resource across its Mopane project in South Africa.
The company is valued at around $29 million.
