Fastnet Oil & Gas, the exploration company listed on the Dublin and London alternative investment markets, is to seek shareholder approval to switch to the biopharma sector and abandon its activities off the coasts of Ireland and Morocco.
The company, which is chaired by one of the founding directors of Merrion Corporate Finance, Cathal Friel, and has offices in Dublin and London, began trading on the AIM and ESM markets in June 2012, when it raised €10 million.
In a statement it said it had a cash balance of $15.9 million at the end of July last and had successfully reduced its annual overheads by more than 40 per cent, since December 2014, to $1.9 million. If its change of function is supported at a general meeting in London on August 28th, then it intends to reduce its annual running costs to $0.6 million.
Its chief executive, Carol Law, will resign if the proposal is approved, and other board changes are also likely, the company said.
The decision to abandon the exploration sector flows from the worldwide decline in oil and gas prices and the associated adverse sentiment towards small cap oil and gas concerns, it said.
“The board believes that the healthcare industry, particularly the biopharma sector, is experiencing strong momentum and there exist significant M&A and value creation opportunities for both small and large cap companies.”
The board also believes it has access to an international pipeline of such opportunities, the company said in its statement. It will initially focus on opportunities in Europe, it said.
Fastnet, which will change its name to Fastnet Equity plc, intends to take an equity interest in a proposed investment that is likely to be a majority position to 100 per cent, and said that its financial resources are likely to be invested in potentially one or more investments in a single transaction which will be deemed a reverse takeover.
A failure to effect a transaction within twelve months of the general meeting would lead to trading in the company’s ordinary shares being suspended.
