Reach En­ergy to ‘ try again’ next week

> EGM to be held on Nov 16 for vote on US$154.9m Kaza­khstan qual­i­fy­ing as­set deal


PETALING JAYA: Reach En­ergy Bhd, which saw the post­pone­ment of its EGM last Fri­day, has set Nov 16 (next Wed­nes­day) as the new polling date for its pro­posed qual­i­fy­ing ac­qui­si­tion (QA) of an as­set in Kaza­khstan for US$154.89 mil­lion (RM640.54 mil­lion).

In a fil­ing with the stock ex­change yes­ter­day, the spe­cial pur­pose ac­qui­si­tion com­pany (SPAC) said the new date was de­cided fol­low­ing the ex­ten­sion of its longstop date to Nov 17.

The venue, how­ever, has been changed to Sime Darby Con­ven­tion Cen­tre, Kuala Lumpur.

Reach En­ergy’s EGM, which was sup­posed to be held last Fri­day, was ad­journed on share­hold­ers’ re­quest to have more time to look into the mer­its of the ac­qui­si­tion.

An­a­lysts view the ad­journ­ment as a pos­i­tive move, say­ing it will ben­e­fit Reach En­ergy’s man­age­ment and its share­hold­ers.

An an­a­lyst who de­clined to be named said the ad­journ­ment would give its share­hold­ers more time to un­der­stand the pro­posed ac­qui­si­tion, since the cir­cu­lar on the deal was avail­able to the share­hold­ers only on Oct 13 this year.

“I think it (the EGM ad­journ­ment) will not jeop­ar­dise any­thing. In fact, it gives the man­age­ment more time to en­gage with the share­hold­ers, so that they (share­hold­ers) will be more in­formed of the ac­qui­si­tion’s ben­e­fits.

“Tim­ing-wise, rather than go­ing a few more rounds of get­ting re­jected, it is bet­ter for them to en­gage with the share­hold­ers for bet­ter un­der­stand­ing of the pro­posed ac­qui­si­tion,” he told Sun­Biz.

How­ever, the an­a­lyst said the com­pany still has enough time to ex­plore new ac­qui­si­tion deals if share­hold­ers vote down the pro­posed oil­field ac­qui­si­tion. “They have un­til next year to con­clude the QA. But I think this is quite a good deal for both par­ties, I would say,” he noted.

Reach En­ergy is to pay US$154.89 mil­lion for a 60% stake in Palaeon­tol BV, which is the owner of an on­shore oil and gas field called Emir-Oil LLP in Kaza­khstan. It has un­til Aug 14, 2017 to com­plete its QA be­fore grad­u­at­ing from a SPAC to a full-fledged oil and gas ex­plo­ration firm.

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