Eurogas Sets Date for Subsidiary's Spin-Off
Eurogas Corporation announced that its Board of Directors has set August 5, 2008 as the record date for the spin-off of its wholly-owned Barbados subsidiary, Eurogas International Inc., in connection with its previously announced restructuring plan.
In connection with the restructuring, Eurogas will exchange its currently held common shares of Eurogas International for preferred shares and new common shares of Eurogas International and immediately distribute these new common shares of Eurogas International by way of a dividend-in-kind to holders of Eurogas' common shares at the close of business on the record date. Each holder of Eurogas common shares on the record date will receive one common share of Eurogas International for each five Eurogas shares held. Shareholders will not receive shares or cash in lieu of fractional shares.
Eurogas International's sole assets are cash of approximately $10 million and its current interest in the one million off-shore acreage (Sfax) oil and gas exploration venture in Tunisia, which is currently being funded by Delta Hydrocarbons B.V. (Delta). Delta has committed to spend US $125 million to earn a 50% interest in the Sfax permit. The current work program agreed to by the partners includes the drilling of up to four wells. The first well, which is an appraisal well on the Ras El Besh structure, is currently being drilled. To date, Delta has spent approximately US $30 million, including reimbursement of past expenditures and on current drilling. Subsequent to Delta fulfilling its commitment, Eurogas International's interest will be 22.5% and Eurogas International will participate as to 22.5% of further expenditures on the Sfax permit.
The objective of splitting Eurogas into two separate publicly traded companies is to enhance shareholder value, and to complete the distribution on a tax efficient basis for all shareholders and the Company. Following the restructuring, Eurogas will retain its interest in the Castor underground gas storage facility in Spain along with the current value of Eurogas International through its preferred shareholding, and common shareholders of Eurogas at the close of business on the record date will gain a direct interest in any future value that may be realized in Eurogas International. Eurogas International will have approximately 32 million shares outstanding following the distribution of the common shares.
The common shares of Eurogas International will be held by an escrow agent until such time as a receipt for a prospectus of Eurogas International has been obtained. Shareholders will not be able to trade the Eurogas International shares until such time. It is intended that a preliminary prospectus will be filed within approximately four weeks of the date of distribution, and a final prospectus will be filed and mailed to shareholders once a receipt has been issued by the securities regulatory authorities. A listing of Eurogas International common shares will also be sought concurrently on the TSX Venture Exchange. There is no assurance such a listing will occur. It is expected that the whole process will take approximately two months. Further information about the timing and exact dates will be issued in future news releases.
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