Tethys Financing Deal with AGR Falls Through, Talks with Nostrum
Central Asia-focused Tethys Petroleum announced Monday that a $47.7-million financing deal with AGR Energy, which the company's management previously said represented "a transformational deal for Tethys", has fallen through. However, talks with Nostrum Oil & Gas, a company with interests in the Caspian Basin, are back on in spite of Tethys rejecting Nostrum's original takeover approach in mid-July.
This time, Tethys and Nostrum have negotiated a $5 million loan financing in order to support short-term liquidity at Tethys during the period in which any formal offer may be made. Tethys has also agreed to grant exclusivity to Nostrum until August 25 for the purpose of conducting due diligence.
Nostrum's proposed offer for Tethys remains at CAD 0.2815 ($0.17) per Tethys share, which would value Tethys at approximately $57 million (based on the 336.7 million shares that have so far been issued by Tethys).
Tethys Executive Chairman John Bell commented in a company statement:
"With the latest news around the previously-announced financing with AGR Energy, the board of Tethys has engaged in positive discussions with Nostrum and we are very pleased to have secured additional financing from Nostrum to meet our near-term liquidity needs. We look forward to working closely with Nostrum over the coming weeks in connection with its indicative possible offer for Tethys."
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