Arawak Terminates MENA Strategic Cooperation Agreement with Gulfsands
Gulfsands Petroleum plc (Gulfsands, the Group or the Company), the oil and gas production, exploration and development company with activities in Syria, Morocco, Tunisia and Colombia provided Friday the following update with respect to its relationship with Arawak Energy International Limited (Arawak) concerning the Strategic Cooperation Agreement for the acquisition and development of new business opportunities in the Middle East and North Africa (MENA) region (the Strategic Cooperation Agreement) and the $20 million Convertible Loan Facility (the Loan Facility and the Facility Agreement) announced Nov. 19, 2014.
Late Jan. 22, the Company was advised by Arawak that as a result of its dialogue with the Company over recent days and corporate developments over the last few weeks including public statements made by certain shareholders of the Company and non-executive directors of the Company, Arawak has determined that it should terminate the Strategic Cooperation Agreement.
Further, Arawak has confirmed that in view of these events, it reserves all of its rights under the Facility Agreement. Arawak's rights under the Facility Agreement may in certain circumstances, include the right to terminate the Loan Facility and to require repayment of all moneys advanced under the Loan Facility.
Arawak has also advised the Company that in the event the removal of Messrs Sajjad and Judge as executive directors of the Company, whose removal as directors of the Company are matters the subject of resolutions to be considered at a General Meeting of the Company Feb. 3, takes effect, it will not hesitate to act to enforce its rights under the Loan Facility.
At the present time, $10 million has been advanced by Arawak under the Loan Facility. In the event the Loan Facility is cancelled and repayment is required in the circumstances to which Arawak has referred, the Company would be obligated to repay all moneys advanced by Arawak together with additional fees and expenses estimated at approximately $1 million, within approximately 90 days of the date of receiving Arawak's notice of demand for repayment.
Having been informed of Arawak's views in relation to these matters, shareholders should consider the implications of the decisions to be taken at the General Meeting to be held Feb. 3.
In light of these developments, the Company will necessarily have to examine its options to ensure the availability of funding to repay moneys owing under the Arawak Loan Facility and to continue to finance the Group's corporate activities, should Arawak move to demand repayment of advances under the Loan Facility.
A further update on all of these matters, including developments with respect to the relationship with Arawak, will be provided as soon as possible.
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