As per the recent update, Planet Gas Limited (ASX: PGS) has made a Sale and Purchase Agreement with High Peak Royalties Limited (‘High Peak’) in order to sell its entire interest (debt and equity) in its wholly owned subsidiary, Planet Gas USA Inc. (‘PGS USA’). The sale of the Planet Gas Inc. will result into the freedom from all obligations which the company owed to the Macquarie Bank Limited who is pursuant to a loan facility agreement with PGS USA of approximately US$2.75 million.
As per the Directors advise, the sale of PGS, USA is subjected to the approval from the shareholders of the company for the purpose of listing rule 11.2., due diligence and also the finalizing of the financing terms of Macquarie. The Company continues to consider investment opportunities that may add shareholder value. Assuming the sale of PGS USA completes, any acquisition will require re-compliance with Chapters 1 and 2 of the Listing Rules. As per the agreement with High Peak, the acquisition of Planet Gas, USA will be done for a nominal rate of $1.00 and will include all the debt which company owed to Macquarie Bank Limited. As per the agreement signed between both companies, the High peak will acquire all shares of Planet, the USA who is having a diverse portfolio of oil and gas royalties. These royalties generate revenue worth US$30,000 per month approximately and US$360,000 annually. Macquarie bank has given an indication to the High Peak to assign a current facility of US$15 million. The interest charged will be 5.5% +LIBOR which includes a guarantee from the standard parent company.
For the half-yearly period ended 30 June 2018, the net loss made by the company is $348,279. The company has total assets worth $3,619,327 and total liabilities worth $5,248,754. As a result of this, the company has net liabilities of $1,629,427. As per the balance sheet of the company, there is a deficiency in the total shareholder's equity worth $1,629,427. The cash generated from operating activities is worth $70,537. The company had done the repayment of the borrowings worth $195,567. The net decrease in the cash and cash equivalent was $125,030. As a result of this, the cash and cash equivalent at the end of the period is $18,010.
The company throughout its journey has shown a negative performance. Since its inception, the performance of the company is -92.87%. The 1 year, 5 years and 10 years performance of the company is -33.33%, -85.19% and -90.59% respectively.
The current market price of the company is A$0.005 (AEST 4 pm) with a market capitalization worth A$2.15 million. As per the chart, the moving average convergence and divergence line has touched the signal line from below and is moving in the upward direction indicating that price may go bullish.
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