Verenex announced that on September 7, 2009, CNPC International Ltd. ("CNPCI") delivered written notice to Verenex terminating the acquisition agreement entered into with Verenex on February 24, 2009 (the CNPCI Agreement").
Under the CNPCI Agreement, CNPCI agreed to make an offer to purchase all of the outstanding Verenex Shares, on a fully-diluted basis, at a price of Cdn$10 per share and to also fund a Cdn$47 million approval bonus to the Libyan National Oil Corporation (the "NOC"). Consent by the NOC to the offer by CNPCI was required under the Exploration and Production Sharing Agreement for Area 47 (the "EPSA"); however, under the terms of the EPSA, such consent cannot be unreasonably withheld.
Despite Verenex having complied with all the requirements of the EPSA and the NOC throughout the public sale process, the NOC has failed or refused to provide consent to the CNPCI Agreement and stated its intent to purchase Verenex subject to approval of the General People's Committee ("GPC").
At this time, Verenex is in discussions with Libyan authorities, including representatives of the GPC, to reach an agreement on the sale of Verenex to a Libyan investment fund on acceptable terms without Verenex having to pursue its legal remedies. The GPC has made it clear to Verenex that it is seeking to negotiate a reduced purchase price.
Investors are cautioned that there can be no assurance that a sale transaction will be concluded.
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