Reach En­ergy EGM ad­journed at share­hold­ers’ re­quest

The Sun (Malaysia) - - MEDIA & MARKETING - BY WAN ILAIKA MOHD ZAKARIA

KUALA LUMPUR: The doom and gloom sur­round­ing the oil and gas sec­tor con­tinue to curb in­vest­ments in the sec­tor as yet an­other spe­cial-pur­pose ac­qui­si­tion com­pany (SPAC) – Reach En­ergy Bhd – had its EGM to vote on its qual­i­fy­ing ac­qui­si­tion ad­journed, as share­hold­ers asked for more time to “un­der­stand the value of the as­set”.

In a fil­ing with Bursa Malaysia last Fri­day, the com­pany said its EGM has been ad­journed at the di­rec­tion of the share­hold­ers to a date no later than Thurs­day, Nov 10, which is al­ready an ex­tended date for the deal to be sealed.

Reach En­ergy’s war­rants were the most ac­tively traded last Fri­day, with some 124.6 mil­lion war­rants chang­ing hands. The war­rant closed 23% lower at 5 sen. Reach shares closed un­changed at 71.5 sen.

Asked whether Reach En­ergy will seek an ex­ten­sion for the deal’s cut-off date, its man­ag­ing di­rec­tor and CEO Ir Shahul Hamid Mohd Is­mail ( pix) said he felt re­luc­tant to do so as the deal has taken quite a long time, not­ing that ne­go­ti­a­tions started in Oc­to­ber last year.

He re­mains con­fi­dent of the deal go­ing through though, say­ing the com­pany’s share­hold­ers gave a pos­i­tive re­sponse and ex­pressed con­cern whether the man­age­ment would put in all ef­forts to en­sure the ac­qui­si­tion was passed.

“Gen­er­ally, the share­hold­ers felt that it is a good op­por­tu­nity and they want to sup­port the ac­qui­si­tion, but they just want to be a bit more as­sured,” Shahul told re­porters af­ter the meet­ing last Fri­day, which lasted more than two hours.

“They (share­hold­ers) have given us 30 days to come back with the fi­nal de­ci­sion. Some share­hold­ers wanted a bit more time to look at the qual­i­fy­ing ac­qui­si­tion, and I think that is fair.”

Shahul said the cir­cu­lar of the deal was avail­able to the share­hold­ers only on Oct 13 this year, there­fore they may not have had enough time to go through it.

How­ever, he said, the com­pany hopes to hold the meet­ing be­fore the longstop date (cut-off date) un­der the sale and pur­chase agree­ment for the Emir-Oil ac­qui­si­tion, which is Nov 10.

Last March, the SPAC pro­posed to pay US$154.89 mil­lion (RM640.54 mil­lion) for a 60% stake in Palaeon­tol BV, which is the owner of the on­shore oil and gas (O&G) field called Emir-Oil LLP in Kaza­khstan. The com­pany has un­til Aug 14, 2017 to com­plete its qual­i­fy­ing ac­qui­si­tion.

In 2015, Reach En­ergy an­a­lysed over 40 po­ten­tial tar­gets in sev­eral coun­tries, which then were re­duced to four that un­der­went fur­ther eval­u­a­tion and de­tailed tech­ni­cal, fi­nan­cial and le­gal as­sess­ments.

The com­pany needs the ap­proval of at least 75% of its share­hold­ers for the qual­i­fy­ing ac­qui­si­tion to be­come a full-fledged ex­plo­ration and pro­duc­tion O&G com­pany.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.