Perisai set to sell SJR stake

O&G services firm says settlement deal with EOL has lapsed

KUALA LUMPUR: Perisai Petroleum Teknologi Bhd said it has regained the right to sell its 51% stake in SJR Marine (L) Ltd, a ship charterer jointly controlled with Singapore-listed Emas Offshore Ltd (EOL) following the lapse of a settlement agreement with EOL.

In a filing with Bursa Malaysia yesterday, it said this was because the final deadline to satisfy the conditions precedent under the settlement deal had passed.

While Perisai did not mention the price sought for the shares, it had previously said the share sale agreement and its provisions set the price of the option shares at US$43.03mil (RM184.82mil).

In the statement yesterday, the upstream oil and gas service provider said: “EOL had on Aug 15, 2017 confirmed that EOL has not received any representation from OCBC which would allow EOL to conclude whether or not the conditions precedents would be satisfied.

“EOL further confirmed that the long stop period be extended only up to July 23, 2017. As the long stop period has since lapsed, the proposed settlement agreement has become ineffective.”

Perisai said that in accordance to the terms of the proposed settlement agreement, the put option granted by EOL to Perisai to sell its 51% stake in SJR Marine had therefore been revived.

According to Perisai, the proposed settlement agreement has been aborted and it will seek to complete the put option within 30 days.

To recap, on Nov 30, 2012, Perisai inked a conditional share sale agreement to buy 51% equity interest in ship and boat leasing firm Emas Victoria (L) Bhd, owner of floating production, storage and offloading (FPSO) vessel Lewek Arunothai, from EOL (then known as EOC Ltd) for US$89.25mil (RM393.34mil).

The purchase consideration was to be satisfied with new Perisai shares, set off against the US$37mil (RM158.92mil) disposal consideration of 50% stake in vessels, barges and equipment lessor SJR Marine, which owns a derrick lay barge called the Enterprise 3. (Later the parties agreed to reduce the said equity stake to 49%.)

Perisai granted EOL a call option to acquire the remaining 51% equity interest in their jointly-controlled entity SJR Marine at the same price as the disposal consideration in cash within the following two years.

In the event the call option was not exercised, SJR Marine would source for third party buyers for the Enterprise 3 on terms to be mutually agreed on within 12 months after the expiry of the call option.

If SJR Marine were unable to dispose of Enterprise 3 within the said 12-month period, Perisai would have a put option to require EOL to buy its equity interest in SJR Marine at the same price as the call option for cash.

Fast forward to December last year (after three supplemental agreements had been entered into by the parties): EOL, in a notice dated Dec 8, 2016, said following “certain breaches” by Perisai, EOL had the right to and sought to terminate the the share sale agreement and the shareholders agree- ment (SHA) signed in December

2013.

It said the put option would be extinguished and EOL would acquire Perisai’s shares in SJR Marine at the price of US$1.

Perisai, meanwhile, issued a notice also on Dec 8, 2016, stating that it was exercising the put option, which it said was irrevocably and unconditionally granted by EOL under the agreement.

Later in December, Perisai and EOL entered into a settlement agreement to achieve a full and final settlement of the disputes.

Subject to the completion of the conditions precedent, EOL would buy the put option shares for US$43.043mil and pay the accrued deferred payment interest.

Among the conditions precedent was EOL must provide Perisai with evidence that it had obtained a US$20mil (RM85.9mil) secured term loan facility from an existing bank lender for the purpose of part financing and purchase of the put option shares and a US$1.5mil (RM6.4mil) secured term loan facility from the lender for the purpose of working capital.