TIDMMXP
RNS Number : 1589B
Max Petroleum PLC
05 October 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
5 October 2015
Max Petroleum Plc
("Max Petroleum" or the "Company")
Corporate update
and
Cancellation of admission to AIM
As a result of the uncertainty surrounding Max Petroleum's
financial position, the Company's Ordinary Shares have been
suspended from trading on AIM since 2 March 2015.
The Board of Max Petroleum regrets to announce that, due to
continued uncertainty surrounding the Company's financial position,
admission of the Company's Ordinary Shares to trading on AIM will
be cancelled, pursuant to AIM Rule 41, with effect from 07:00 on 6
October 2015 ("Cancellation").
Notwithstanding Cancellation, Max Petroleum and AGR Energy will
continue to work to satisfy all relevant conditions for completion
of the Subscription.
The continued uncertainty surrounding the Company's near term
financial position principally relates to:
-- outstanding consent of the Kazakh antimonopoly authorities
for the Subscription, which is required for completion of the
Subscription; and
-- continued uncertainty regarding the timing and outcome of the
Rehabilitation process of the Company's wholly owned subsidiary,
Samek International LLP ("Samek"), and a creditor application to
commence bankruptcy proceedings.
The above, together with other uncertainties, have in turn
impacted the ability of the Group's auditors currently to provide
an audit opinion for the Accounts of the Group for the year ended
31 March 2015.
Corporate Update
On 14 September 2015, Samek's application for Rehabilitation was
rejected by the Specialised Inter-District Economic Court of Almaty
(the "Court") and Samek is in the process of filing an appeal. On
the basis of legal advice, Samek is optimistic about the positive
outcome to the appeal. Samek intends to present to the Court a
comprehensive set of arguments in favour of the appeal, as well as
a broadened support for Rehabilitation.
Notwithstanding the Court's decision on 14 September 2015, Samek
continues to benefit from certain protections of the Rehabilitation
process - the execution of existing Court decisions and arbitration
awards against Samek (resulting from claims made by trade suppliers
and a contractor) were suspended and creditor claims against Samek
can only be brought within the framework of the Rehabilitation
procedures (subject in each case to certain exemptions which the
Max Petroleum Directors do not consider relevant in these
circumstances). If the appeal is successful, Court approval of the
Rehabilitation process will provide Samek with ongoing additional
protection against creditors throughout the Rehabilitation period
with no accrual of interest or penalties, including in respect of
the Sberbank loan.
Baker Hughes Services International, Inc ("BHSI"), a creditor of
Samek, is owed approximately US$0.3 million. On 9 September 2015,
BHSI filed a petition to the Court seeking the bankruptcy of Samek.
On 15 September 2015, a bankruptcy manager was appointed over
Samek. At a Court hearing on 22 September 2015 Samek sought to
suspend BHSI's bankruptcy proceeding while it appeals the Court's
rejection of its application for Rehabilitation. However, Samek's
motion was rejected by the Court, and the next hearing over Samek's
bankruptcy is to take place on 8 October 2015. At this point,
however, the appeal on Rehabilitation will have been submitted and
Samek believes it highly unlikely that the Court could decide to
bankrupt Samek while this appeal is being reviewed.
Intention to complete the Subscription
Max Petroleum and AGR Energy continue to work to satisfy all
relevant conditions for completion of the Subscription and have
entered into an amendment agreement that, inter alia, extends the
Long Stop Date to 27 October 2015 and waives the condition relating
to Admission of the Subscription Shares for completion of the
Subscription. Cancellation will not affect the parties' efforts to
complete the Subscription and AGR Energy remains committed to Max
Petroleum, its assets and prospects, albeit the Company's Ordinary
Shares will no longer be publicly traded on an investment
exchange.
Financial position
In due course Max Petroleum and AGR Energy expect:
-- antimonopoly approval to be obtained;
-- completion of the Subscription to occur; and
-- the Rehabilitation appeal to be heard.
On the basis of positive outcomes for the above, the Accounts of
the Group for the year ended 31 March 2015 are expected to be
published with a more appropriate audit opinion provided by the
Company's auditors.
The above will provide additional certainty regarding the
Company's financial position.
Shareholders should note previous regulatory disclosures of the
Company, which have highlighted:
-- Max Petroleum's working capital position: following
completion of the Subscription and receipt of the Subscription
proceeds, Max Petroleum is forecast to be funded until at least the
end of December 2015 (subject to the assumptions stated).
-- potential other issues that may impact on Max Petroleum's
financing requirement in the mid- and longer term, including in
respect of: its work programme commitments; the historical costs
claim from the tax authorities; its crude oil delivery obligations;
the outcome of the Rehabilitation creditors' meeting; and the
replenishment of its Liquidation Fund.
Max Petroleum and AGR Energy will use the period until 31
December 2015 and beyond to make further progress in discussing
these issues with the relevant counterparties.
Effects of Cancellation
The principal effects of the Cancellation will be that:
a) Shareholders will no longer be able to buy and sell shares in
the Company through a public stock market;
b) the Company will not be bound to announce to the market
material events, administrative changes or material transactions,
nor to announce interim or final results; and
c) the Company would no longer be subject to the AIM Rules;
Shareholders would no longer be required to vote on certain matters
as provided in the AIM Rules; and the Company would no longer be
subject to the provisions of the Disclosure and Transparency Rules
relating to the disclosure of changes in significant shareholdings
in the Company.
Effective from 07:00 on 6 October 2015, Stifel will cease to be
the nominated adviser to the Company.
Cancellation may have certain tax consequences for Shareholders
and those Shareholders who are in any doubt about their tax
position should consult their independent financial adviser.
Corporate governance following Cancellation and completion of
the Subscription
Although the way in which the Company would communicate with
Shareholders would be altered by the Cancellation, AGR Energy and
the Board nevertheless intend to maintain a broadly comparable
standard of corporate governance and compliance as has previously
existed.
Following Cancellation and completion of the Subscription, the
Directors:
a) will hold an Annual General Meeting and, when required, other
general meetings, in accordance with the applicable statutory
requirements and the Articles;
b) will make available to all Shareholders an audited annual
report and unaudited half-yearly financial reports, each prepared
in accordance with IFRS standards; and
c) intend to maintain an "Investors" section on the Company's
website at www.maxpetroleum.com providing information on any
significant events, developments or operational updates in which
Shareholders may be interested.
The Takeover Code and the Companies Act currently apply to the
Company and will continue to apply to the Company notwithstanding
the Cancellation.
AGR Energy and the Board believe that this continued approach to
all Shareholders will serve to underpin good governance at the
Company in the future.
Trading of Ordinary Shares
Shares will remain freely transferable after Cancellation,
although there will be no market facility for dealing in the
Ordinary Shares and no price will be publicly quoted for the
Ordinary Shares from 6 October 2015. As such, interests in Ordinary
Shares are unlikely to be readily capable of sale and where a buyer
is identified, it may be difficult to place a fair value on any
such sale.
Immediately following the Cancellation, the Directors do not
anticipate applying to admit the Ordinary Shares to trading and/or
listing on an alternative stock exchange in the foreseeable future
and any transaction in Ordinary Shares undertaken after the
Cancellation will only be capable of being undertaken by private
sale. If any private transaction in the Ordinary Shares is effected
following the Cancellation, the parties should contact the
Company's registrar, Capita Registrars, so that the transaction can
be registered by the Company. The Company's CREST facility will be
maintained for the settlement of uncertificated share
transaction.
In due course, and subject to completion of the Subscription,
the Company and AGR Energy will investigate the establishment of an
off-market trading facility which would enable, where possible, the
matching of trades in the Ordinary Shares between willing buyers
and willing sellers. However, Shareholders should be aware that any
matched trade service will not offer the same liquidity as AIM as
such service is not an investment exchange, nor a public market,
nor is it recognised or designated by the Financial Conduct
Authority or any other regulatory authority.
Further updates will be available on the Company's website:
www.maxpetroleum.com
Save where the context requires otherwise, capitalised and
technical terms used in this announcement shall have the same
meaning as ascribed to them in the Company's circular to
shareholders dated 13 August 2015.
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