Zeta Petroleum (ASX:ZTA) has entered into an agreement with its major shareholder, GM Investment & Co, whereby GMI will provide a $2 million convertible loan.
The term of the GMI Loan is six months unless converted or repayable earlier in certain circumstances, with interest at 10% per annum.
Shares issued under the loan will be at a 20% discount to Zeta's issue price at AIM admission.
Proceeds of the GMI Loan are necessary to ensure that the company has adequate finances to meet certain short term commitments under its work program in Romania, to provide working capital and to fund its application for admission to trading on the AIM market of the London Stock Exchange.
GMI is Zeta's largest shareholder, owning 86,770,278 shares amounting 34.5% of its issued share capital.
The GMI Loan forms part of an integrated plan that ensures funding to enhance existing production and development in Romania as well as developing new opportunities for growth, whilst Zeta works towards a listing on AIM in London.
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