NuEnergy Gas Limited (ASX: NGY), a company engaged into various gas exploration activities on 24 April 2019, provided an update related to the Investment Agreement (IA), with Saujana E&P Sdn Bhd (Saujana E&P) to take up a strategic investment in NuEnergy through a share placement. The share placement was of 1,540,832,050 new shares of NuEnergy, at a placement price of $0.025 per share, with the total subscription value of $38,520,801 as per the terms and condition of the Investment Agreement. By investing in 1,540,832,050 new NuEnergy shares, the company would receive 51% control of the enlarged share capital of NuEnergy.
On 2 April 2019, NuEnergy Gas Limited had announced that it had entered into a binding agreement with Saujana E&P Sdn Bhd to provide funds, for the development of its Indonesian Coal Bed Methane (CBM) Production Sharing Contract (PSC) programs, as well as the Tanjung Enim PSC Plan of Development (TEPOD).
Saujana E&P is a private limited investment holding company from Malaysia, which is engaged in the investment in oil and gas exploration, as well as the production businesses. The team of Saujana E&P consist of the core management team, along with professionals who have extensive experience, and specialization in the oil and gas industry in South East Asia and globally.
According to the terms and condition of IA as following:
- Saujana E&P was supposed to pay $7,014,590 to the company, within 14 business days after the IA was executed. The Deposit amount of $7,014,590 was secured by 280,583,614 shares of NuEnergy and pledged by existing major shareholder New Century Energy Resources Limited in favour of Saujana E&P as per the pledge agreement.
- The share placement is conditional and depends on the successful completion of the due diligence by Saujana E&P. Also, Saujana E&P by 31 May 2019, must complete the due diligence on the company, as well as its subsidiaries.
- Globaltec Formation Berhad and the Company require approval from the respective shareholders, as well as the approval of any required regulatory authority for either of the companies.
- In case, the company fails to obtain necessary permission by 15 August 2019, Saujana E&P holds rights to terminate IA, or there is a possibility that both parties can negotiate for an extension of time.
- If Saujana E&P wishes to terminate the IA, then Saujana E&P need to make sure that New Century transfers some or all the Pledged Shares to it in satisfaction of the obligation of NGY to pay the deposit.
- In case, all the Pledged Shares are not transferred to the Investor, NuEnergy has agreed to indemnify New Century by paying the balance remaining to the investor up to a maximum of $7,014,590.
- The transaction will also result in changes in the company’s board.
- After the conclusion of the Share Placement, Saujana E&P can nominate four out of five members to the board.
As per the announcement on 24 April 2019, the company has advised that Saujana E&P has requested for an extension for paying the deposit amount, that was supposed to be given within 14 business days after the execution of the IA. NGY has given seven business days extension to Saujana E&P to make the payment by 3 May 2019.
In the last six months, the shares of NGY generated a negative return of 59.46%. The shares in the previous one month have given a return of 7.14%. The shares traded last on 23 April 2019 with the closing price of A$0.015. NuEnergy Gas Limited holds a market capitalization of A$22.21 million.