KUALA LUMPUR: Sumatec Resources Bhd has entered into a third supplemental agreement with its vendors for its proposed US$290mil (RM1.22bil) acquisition of an oilfield in Kazakhstan to alleviate its upfront financial commitment and to give it more financial flexibility.
The variations in the new agreement includes extending the deadline to Aug 22, 2016 for the fulfillment of the condition precedent and the payment by Sumatec of the balance cash payment amounting to US$105mil (RM442.7mil).
The vendors have also agreed to re-allocate the purchase price between themselves, said Sumatec in a filing with Bursa.
Abdul Talib Abdul Rahman and Dr Murat Safin have also reallocated among themselves the sums to be paid between themselves for the deposit, balance of cash payment and final payment. Nonetheless, the total purchase price for the proposed acquisition remains the same at US$290mil (RM1.22bil).
Notably, the payment by Sumatec for the final balance payment of US$75mil (RM316.2mil) will be deferred in stages beginning from Dec 31, 2016 up to Dec 31, 2019.
“The deferred payment is expected to alleviate the upfront financial commitment for Sumatec, and provide additional financial flexibility as the deferred payment can be funded through Buzachi Neft’s internally generated funds post completion of the Proposed Acquisition,” said Sumatec.
Sumatec’s shares closed 1 sen down on Tuesday to 11 sen on volume of 5.72 million shares.
Recall that in July 2014, Sumatec first announced this deal at a purchase price of US$350mil (RM1.47bil). However in Jan 2015, Sumatec cut its purchase price by US$60mil (RM252mil) to US$290mil citing the sharp drop in crude oil prices.
Of the purchase price of US$290mil, US$210mil will be satisfied in cash and the balance US$80mil via the issuance of 1.217 billion shares at 23 sen each to the vendors: 684.78 million shares to Abu Talib Abdul Rahman and 532.61 million shares to Dr Murat Safin.
Sumatec will pay US$190mil for the Bazachi Neft oilfields, which have “proved and probable” oil reserves of 68.87 million barrels of oil, and US$100mil for ancillary assets.
In a filing with Bursa, Sumatec said that the market price of Sumatec shares had fallen from an average of 21 sen in April last year to 11.83 sen in January 2016.
As disclosed in its circular, Sumatec is expected to raise at least RM835.8mil from its proposed rights issue with warrants based on the indicative issue price of 20 sen per share at a minimum scenario.
“Based on the prevailing share price of Sumatec and the deferred payment, the board has resolved to revise the amount to be raised under the minimum scenario to RM487.6mil based on the minimum issue price of 14 sen per rights share,” said Sumatec.
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