Oilex Ltd (Oilex) announced Friday that pursuant to the Sale and Purchase Agreement (SPA) entered into with Magna Energy Limited (Magna) Aug. 9, 2013 for the Cambay Production Sharing Contract (PSC) in India's Gujarat, the SPA unwind process has been triggered.
This means Magna will become a cornerstone investor in Oilex, acquiring a 12.46 percent equity interest in the enlarged share capital and Oilex will retain its full 45 percent direct interest in the Cambay PSC.
Oilex refers to its various previous announcements (Announcements) in relation to the SPA with Magna whereby Oilex agreed to sell up to a 15 percent participating interest in the PSC incorporating its Tight Hydrocarbon Project in Gujarat, India for up to $6 million (Transaction).
As set out in the Announcements and the Oct. 4, 2013 Notice of Meeting (NoM), if the Government of India consent was not received prior to May 1, (Cut Off Date) the Transaction may be "unwound" and Oilex, to the extent practicable, is required to convert payments made by Magna to Oilex into shares in Oilex (Unwind Shares).
Oilex Shareholders approved the Transaction at an Extraordinary General Meeting Oct. 4, 2013. Oilex was also granted a specific waiver of ASX Listing rule 7.2.3 to permit the issue of up to $4 million of Unwind Shares to Magna. This waiver expires June 4.
Following the payment of an initial deposit of $200,000 in August 2013, Magna subsequently paid Oilex a further $3.8 million, less applicable Indian withholdings, in accordance with the SPA. This equates to $4 million gross for an initial 10 percent participating interest in the PSC. While the Option for an additional 5 percent interest in the PSC was exercised by Magna, settlement was not effected pending receipt of Government of India approval of the transfer.
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