Sefton Resources Inc Thursday said it has issued 4.0 million shares in order to convert USD10,000 – Magna Group Capital

LONDON (Alliance News) – Sefton Resources Inc Thursday said it has issued 4.0 million shares in order to convert USD10,000 of a previously announced loan note at the equivalent of 0.153 pence per share with Hanover Holding I, LLC, an affiliate of US-based investment fund Magna Group.

The struggling oil and gas explorer, with operations in California and Kansas, said application has been made for the new shares to be admitted to trading on AIM and the outstanding balance of the loan note is now USD155,000.

Sefton Resources entered into the unsecured loan note deal with Hanover in January for the principal amount of USD210,000.

The company said at the time that it has an interest coupon for the loan note of 4% per annum and any principal element of the note can be converted into shares at Sefton at the discretion of Magna at a discounted price.

Sefton also issued Magna with 5.1 million warrants to subscribe for common shares in Sefton at a price of 0.36 pence per share.

The company announced in October that it was in discussions with certain parties over funding or the potential acquisition of some of its assets following a difficult period which saw the resignation of the company’s Chief Executive.

Sefton recently agreed terms with bloggers Tom Winnifrith and Dan Levi for the termination of legal proceedings it took out against the pair on February 25. The company brought the libel case against Winnifrith and Levi after they alleged Fox Davies Capital resigned as Sefton’s advisers because it felt the company was misleading investors.

In August Sefton announced that as part of the ongoing case and certain documentation it has received, CEO Jim Ellerton had stepped down from the board and his role as CEO while non-executive members of the board, company lawyers, and its nominated adviser began conducting an internal investigation into the matter.

The case against Winnifrith and Levi was due to go move forward in September but the only witness Sefton put forward is Ellerton himself, and company lawyers consider him ?discredited,? Winnifrith claimed in an interview with Alliance News in August.

Sefton also announced in October that as part of its ongoing cost cutting measures the consultancy contract which Jim Ellerton, the company’s former Chief Executive, is holding will not be renewed when it expires on December 31 2013.

Sefton Resources shares were down 20.5% to 0.151 pence Thursday.

By Tom McIvor;; @TomMcIvor1