Max Petroleum: AGR Energy to Own 51% After $59m USD Investment

Max Petroleum Plc is pleased to announce that it has today published a circular containing further details of the £37.1 million investment to be made by AGR Energy, subject to the fulfillment of certain conditions described below, and a notice of General Meeting, at which resolutions will be proposed to approve this investment.

Highlights

·      On 4 August 2014, Max Petroleum announced that it had conditionally raised approximately £37.1 million (approximately US$59.0 million) by way of a cash subscription by AGR Energy.

·      The Subscription is for 2,264,093,462 new Ordinary Shares, at a price of 1.64 pence per Ordinary Share, a 111.6 per cent. premium to the closing middle market price of an Ordinary Share of 0.775 pence on 11 November 2014, the last business day prior to the date of this announcement.

·      Immediately following completion of the Subscription, AGR Energy will hold 51 per cent. of the enlarged issued share capital of the Company.

·      The Company and AGR Energy are intending to use the proceeds of the Subscription to reduce gearing and strengthen the Group’s balance sheet; undertake a share buyback by way of a tender offer (as described below); progress the Group’s development assets; fund any preliminary costs to prepare for re-entering the NUR-1 well; and consider investing in other projects in Kazakhstan and Central Asia.

·      The Board has agreed with AGR Energy that the Company intends to undertake a share buyback by way of a tender offer to all Shareholders within six months following completion of the Subscription, at a price of 1.64 pence per Ordinary Share, as described below. It is intended that £10,000,000 will be available for the Tender Offer.

·      The Company has received irrevocable undertakings (subject to certain customary exceptions) to vote in favour of the Resolutions from certain Directors and Shareholders holding (directly or indirectly) in aggregate 833,126,172 Ordinary Shares, representing 38.3 per cent. of the Existing Ordinary Shares.

·      The Company, AGR Energy and Oriel Securities (as Nominated Adviser to the Company) have entered into a relationship agreement to ensure that (i) the Company will at all times be capable of carrying on its business with the assistance of a minimum of three Directors who are independent of the AGR Energy Group; (ii) the Group and its activities will be managed for the benefit of Shareholders as a whole; and (iii) all material transactions, agreements and arrangements between: (a) any member of the Group; and (b) any member of the AGR Energy Group, will be at arm’s length and on normal commercial terms and subject to approval by Directors or Shareholders who are independent of the AGR Energy Group.

The Board expects to end the review of strategic options and the formal sale process, announced on 22 July 2014, immediately following the approval by Shareholders of the Subscription Resolutions at the General Meeting.

EXPECTED TIMETABLE

Each of the times and dates in the above timetable are London times and, other than the Long Stop Date which may only be extended with the agreement of AGR Energy and the Company, are subject to change at the absolute discretion of the Company and Oriel Securities. Any such change will be notified by an announcement on a Regulatory Information Service.