Reach Energy Berhad, Malaysia’s fourth and largest special purpose acquisition company (SPAC), secured Thursday the approval of the Securities Commission Malaysia (SC) for its proposed qualifying acquisition of a 60 percent stake in Palaeontol B.V. -- a subsidiary of Hong Kong Stock Exchange-listed MIE Holdings Corp.'s (MIEH) unit Palaeontol Cooperatief U.A. which owns a 100 percent working interest in an onshore block in Mangistau Oblast in southwest Kazakhstan through Emir-Oil LLP.
Emir-Oil owns oil and gas producing fields, development fields and exploration prospects in the 328.3 square mile (850.3 square kilometer) block, with RPS Energy Consultants Ltd. estimating that the indicative gross proved plus probable (2P) reserves stood at 72.1 million stock tank barrels (MMstb) of oil and 102.4 billion standard cubic feet of gas.
Reach Energy will now called for an extraordinary general meeting to seek shareholders' approval for the proposed $154.9 million acquisition.
“The proposed acquisition of Emir-Oil in Kazakhstan is an attractive investment as it contains a balanced portfolio of production, development and exploration fields. These fields will bring immediate recurring revenues to the company and contribute positively to its cash flow, particularly with the expected improving oil prices in the medium to long term. We are confident that this acquisition will bring immense value to our shareholders and other stakeholders alike,” Reach Energy Managing Director Shahul Hamid bin Mohd Ismail said in the press release.
Separately on Thursday, Reach Energy clarified that it will assume 60 percent of Palaeontol B.V.’s outstanding shareholder loans under the acquisition.
Upon completion, it will pay the remaining amount of the purchase consideration to MIEH for the re-assignment and transfer of 60 percent of the shareholder loans in Palaeontol B.V. (together with its accrued interest), from MIEH to Reach Energy.
After the re-assignment, Palaeontol B.V. will owe 60 percent of its outstanding shareholder loans to Reach Energy instead, with the remaining 40 percent to MIEH. Palaeontol B.V. is obliged to repay such shareholder loans to both Reach Energy and MIEH.
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