Refinancing scheme through buy- back of convertible loans ...

Refinancing scheme through buy-
back of convertible loans, a directed
cash set off issue, and a share issue
with preferential right for
shareholders

PRESS RELEASE 13/04/2015

The board of directors of Crown Energy AB (”Crown Energy” or the
”Company”) proposes a refinancing scheme of a total of three share issues;
(i) a debt-equity conversion that clears convertible loan debts with an initial
90 percent pre-acceptance from existing convertible holders (the “Debt-
Equity Conversion”), (ii) a directed cash share issue amounting to
approximately SEK 13 million to set off outstanding debt (the “Set Off
Issue”), and (iii) a rights issue with preferential right for the shareholders
amounting to a maximum of approximately SEK 65million (the “Rights
Issue”). Through these transactions, Crown Energy sees the capital base
vigorously strengthened and cash position secured.

Background

During spring 2013, the Company raised financing by way of convertible
loans to support the acquisition of Simbo Petroleum Ltd, the company that
holds the 40.5 percent interest in licence Block 2B in South-Africa. Now that
the deal has been closed and the ownership is transferred to Crown Energy,
the proposed transactions will support the further development of the asset
base and technical and operational improvements and progress for Crown
Energy.

The Motive

Now that the South-African asset Block 2B deal has been closed, the plan for
it changes completely. From having used much of the time and resources for
deal closing activities, the Company will now change the business scope
completely with respect to this asset. It is very different to market an asset
to third parties etc. once it is actually in place. If Crown Energy at the same
time can approach partners and investors for its assets with a new strong
capital base, the reliability is a lot stronger. The proposed transactions will
not only strengthen the capital base, both by purging the balance sheet of
debts but also increase cash liquidity, but will also see the cost structure
change dramatically. The Debt-Equity Conversion will decrease interest costs
with up to almost SEK 8 million per year.

The use of proceeds

The transactions will re-vitalise the working capital for the Company which is
an important part of the overall scope of the transactions. The circumstances
with the capital, SEK 13 million, that stayed in Crown Energy was a very well
timed opportunity for the overall re-financing scheme and the fact that the

shareholders converting this debt into shares in the Company now supports
the business going forward is very positive for Crown Energy. The capital will
be used for general business purposes as well as proactive initiatives,
especially in developing the assets currently in favour in the oil and gas
industry. The cost savings of cleaning out debts is of course a welcome step
in the overall efficiency improvements for the Company. Crown Energy will
stand much stronger as a result, and that in itself will increase the presence
in the market, directly and indirectly.

The Debt-Equity Conversion and the Set Off Issue are partly or in full directed
to existing shareholders including insiders and large shareholders. These
parties commit to not participate in the Rights Issue whereby the other
shareholders can participate and regain close to the same ownership they
had prior to the transactions, a so called repair issue. At the same time, the
Rights Issue with preferential right for all shareholders could strengthen the
cash position even further for Crown Energy, depending on to what level it is
subscribed.

The share issues will be subject to approval from the upcoming Annual
General Meeting on 13 May 2015. The new shares will be registered with the
Swedish Companies Registration Office (the “SCRO”) and once admitted to
Euroclear Sweden AB, the shares will be tradable on NGM Equity. All issues
will be based on the subscription price SEK 3.33 per share.

The transactions

Debt-Equity Conversion offer
The Company is today launching an offer to the holders of all outstanding
convertible loans (a total of approximately SEK 79 million) to acquire their
respective convertibles in exchange for newly issued shares in a directed set-
off issue proposed by the board of directors to be resolved by the Annual
General Meeting on 13 May 2015. The Company has collected pre-
acceptances from approximately 90 percent of all holders of outstanding
convertible loans which means that a minimum of approximately SEK 70
million debt will be converted into equity and the remaining convertible loan
holders can accept to be part of the offer up to 23 April 2015. Provided that
the full convertible loans are converted into shares, a total of 25,954,785 new
shares will be issued. The subscription price in the share issue under the
Debt-Equity Conversion is SEK 3.03. The difference in subscription price
compared to the other share issues is based on the fact that the Company
offers to buy back the convertible loans without reflecting accrued interest
for one year. Please see the Company web site www.crownenergy.se for
more information and subscription/acceptance forms, and general course of
action. Approximately 60 percent of the pre-acceptances are from insiders
and shareholders in Crown Energy.

Set Off Issue
The board of directors of Crown Energy has also proposed that the Annual
General Meeting resolve on the Set Off Issue setting off approximately SEK
13 million of the other outstanding debts that arose from the closing of the
acquisition of Simbo Petroleum Ltd. Due to accounting procedures in the
acquired company, a cash position has been left with the acquirer, i.e. Crown
Energy, at the time of closing of the first transaction in February 2015. Those
funds will subsequently now be set off against new shares subscribed for by
the sellers, i.e. Comtrack Ventures Ltd and Alan Simonian (also the Chairman
of the Company’s board of directors). Both sellers are shareholders in Crown

Energy. The subscription price in the Set Off Issue is SEK 3.33 and a total of
3,903,903 new shares will be issued.

Rights Issue with preferential right for the shareholders
The board of directors of Crown Energy has further proposed the Rights Issue
with preferential right for the shareholders (this will resemble a so called
repair issue) amounting to approximately SEK 65 million. The acceptance
period is expected to commence on 29 May 2015 and expire on 12 June 2015.
The expected settlement date for subscription with preferential right will be
mid June 2015. The subscription price in the Rights Issue is SEK 3.33.
Shareholders representing approximately 64 percent has agreed to not sell
or use their subscriptions rights. Instead, the other shareholders will be able
to subscribe for shares both with and without subscription rights and will
therefore be able to restore their shareholding as was prior to the Debt-
Equity Conversion and the Set Off Issue. The maximum number of shares to
be issued in the rights issue is 19,367,367 new shares.

Shareholders representing approximately 70 percent of the total number of
shares and votes of the Company have committed to vote in favor of the
share issues at the Annual General Meeting. The parties accepting the Debt-
Equity Conversion Offer and subscribing for shares under the Set Off Issue
have entered into an agreement to not trade the newly registered shares
until settlement in the Rights Issue has occurred, i.e. mid June 2015. A
prospectus will be filed and is planned to be publicly released mid May.

Ulrik Jansson, CEO of Crown Energy comments:

”This is one of the most significant steps for Crown Energy in that we go from
the building phase into the next proper development phase of the Company.
Since the closing of the South-African Block 2B deal, focus has been to bring
that asset and the whole company to the next level, from acquisitions to
technical and financial development. By cleaning out debts and with new
capital in the Company, we stand significantly stronger and will be able to
focus forward looking. We are very pleased having the support from our
convertible loan- and shareholders that now further support the Company
going forward. We are determined and sure that we will see positive technical
and operational updates on our assets in the near future.” says Ulrik Jansson,
Crown Energy CEO.

Prospectus and application forms

A prospectus for the share issues is expected to be approved and registered
by the Swedish Financial Supervisory Authority on or around 18 May 2015.
The prospectus and application forms (in Swedish) will be made available on
Crown Energy’s web site (www.crownenergy.se).

Preliminary time table

Acceptance period for convertible 14 April - 23 April 2015
bond holders to accept the Debt-
Equity Conversion

Annual General Meeting 13 May 2015

Registration of the shares issued 15 May 2015
under the Debt-Equity Conversion
Offer with the SCRO

Announcement of prospectus 18 May 2015

Record date for the Rights Issue 27 May 2015

Subscription period for the Rights 29 May - 12 June 2015
Issue

Settlement for shares subscribed 17 June 2015
for with preferential right

Notice to Annual General Meeting

Crown Energy has today published a notice to the Annual General Meeting
on 13 May 2015. The notice is available on the Company’s web site,
www.crownenergy.se.

Crown Energy AB (publ) discloses above information pursuant to the
Swedish Securities Market Act and/or the Swedish Financial Instruments
Trading Act. The information was released for publication on April 13, 2015,
08:30 AM.

MORE INFORMATION
Please contact Ulrik Jansson, CEO, Crown Energy AB
+46 8 400 207 20
+46 707 51 41 84

ABOUT CROWN ENERGY
Crown Energy is an international oil and gas company engaged in exploration in
Africa and Middle East. Growth is created by developing assets in early stages and
then maximising value by introducing appropriate industry partners in the
development and production stages. For more information please visit
www.crownenergy.se.