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.