Sumatec Trims Acquisition Price Of Borneo Energy

Sumatec Trims Acquisition Price Of Borneo Energy

Sumatec Resources Bhd has entered into a supplemental agreement with vendors to reduce the purchase price for the proposed acquisition of Borneo Energy Oil and Gas Limited by US$60 million (US$1 = RM3.57) to US$290 million.

For the new purchase price, cash payment stood at US$210 million and the balance of US$80 million is by way of issuance of 1.22 billion consideration shares to the vendors at an issue price of 23 sen per share, Sumatec said in a filing to Bursa Malaysia Friday.

It said the purchase price was reduced due to the declined in global oil prices from an average price of US$103.19 per barrel in August 2014 to US$57.33 per barrel in December 2014.

The lower purchase price was also due to the decline in Sumatec’s share price from 48 sen in August 2014 to 21 sen in December 2014.

“As such, the board, having considered all aspects of the proposal, including the variations, is of the opinion that they are fair, reasonable and on normal commercial terms,” it added.

Source: Sumatec Resources

Oil and Gas Press