Max Petroleum: Raises $63m from AGR Energy
Max Petroleum is pleased to announce that it has raised approximately £37.1 million (approximately US$62.5 million) before expenses by way of a conditional cash subscription by AGR Energy Limited No. I (“AGR Energy” or the “Investor”) for 2,264,093,462 new Ordinary Shares at a price of 1.64 pence per Ordinary Share (the “Subscription”), such that the Investor will hold 51% of the Enlarged Issued Share Capital immediately following completion of the Subscription.
– The Subscription Price represents a premium of 33.9% to the closing middle market price of an Ordinary Share of 1.225 pence on 1 August 2014 and a premium of 17.8% to the volume weighted average price per Ordinary Share of 1.392 pence since 1 May 2014.
– AGR Energy is a vehicle owned by the Assaubayev family established for the purpose of the Subscription. Neither AGR Energy, nor any member of the Assaubayev family nor any of their respective associates (“AGR Energy Group”) currently holds any Ordinary Shares or any other securities in Max Petroleum.
– The Subscription is conditional, inter alia, upon each of the following conditions being satisfied on or before 31 December 2014:
(i) the Panel having waived the obligation that would otherwise arise under Rule 9 of the Takeover Code for the Investor to make a general offer to all other Shareholders to acquire their Ordinary Shares in the Company;
(ii) the posting of the Shareholder Circular to Shareholders containing details of the Subscription and the Notice of General Meeting at which the Resolutions will be put to Shareholders to: approve the Rule 9 Waiver, grant the Rule 21.1 Approval (to the extent applicable), grant the Directors the authority to allot the Subscription Shares and disapply the statutory pre-emption rights arising in respect of those allotments;
(iii) Shareholders passing the Resolutions at the General Meeting;
(iv) the Subscription Shares being admitted to trading on AIM;
(v) Subsidiary Bank “Sberbank of Russia” JSC (“Sberbank”) agreeing to alter certain of the reserve and production covenants contained in a facility agreement (the “Sberbank Facility Agreement”) and related loan agreements between Sberbank and the Company’s wholly owned subsidiary, Samek International LLP (“Samek”);
(vi) a waiver by Sberbank of its unilateral uncapped right under the Sberbank Facility Agreement to increase the interest rate on a change of control, and its consent to the change of control on account of the Subscription;
(vii) certain Kazakh regulatory approvals;
(viii) a relationship agreement having been entered into by the Company, the Investor and Oriel Securities Limited (in its capacity as the nominated adviser to the Company); and
(ix) the appointment to the Board of the Company of two Directors nominated by AGR Energy.
Background to the Subscription:
• The Subscription should enable the Group to fund its planned capital programme to develop its post-salt fields and maximise reserves and production. In addition, Max Petroleum will be in a strengthened position to attract financial or industry partners to help finish its pre-salt NUR-1 well and to secure an extension of the exploration period of its Blocks A&E Licence in western Kazakhstan to enable it to have time to finish drilling NUR-1 and, if it is successful, the Kurzhem well. The Company will also be able to consider investment in other projects in Kazakhstan and across Central Asia that complement its existing activities.
• The shareholders of the Investor, namely the Assaubayev family, are long-term investors in natural resources and metals and mining, and have a track record of effective investment and support of enterprises, particularly in Central Asia.
• AGR Energy’s intention is to utilise its local knowledge of, and access to, areas in which the Company operates to support the Company’s further growth, both in respect of existing operations and, more significantly, for new opportunities, including as a consequence of the ongoing consolidation in the oil and gas sector in Central Asia.
• Following completion of the Subscription, the Directors expect to work with AGR Energy to review the Company’s business plan, Board structure and mid-term goals and with the support of AGR Energy, the Company will maintain its efforts to implement the cost cutting initiative which is already well advanced.
• AGR Energy is committed to Max Petroleum remaining an independent company whose shares are publicly traded for the foreseeable future in order to enable the Company’s existing shareholders to participate in the future of the Company and to provide acquisition currency for potential further growth.
Strategic Review:
• The strategic review announced on 22 July 2014 will remain ongoing. Parties with a potential interest in making an offer for, merging with or proposing other forms of corporate transaction with, Max Petroleum should contact the Blackstone Group International Partners LLP (see contact details as set out below).
Shareholder Circular and Notice of General Meeting:
• The Shareholder Circular will be issued, in due course, to Shareholders containing details of the Subscription and the Notice of General Meeting at which the Resolutions will be put to Shareholders and, when issued, the Shareholder Circular will also be available on the Company’s website: www.maxpetroleum.com
Robert B. Holland III, Chief Executive Officer, commented:
“This major investment and the expertise and experience of the AGR Energy Group in Kazakhstan are both very substantial positives for Max Petroleum. This partnership will support our plans for the development of our post-salt fields and our work to resume exploration of pre-salt prospects on the Blocks A&E Licence. The Max platform has demonstrated its operational capability in Kazakhstan and this investment provides us with the strong financial foundation we need to support that platform.”
