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Wednesday, September 24, 2014

Sona optimistic of SC nod for RM895mil Thai deal


KUALA LUMPUR: Sona Petroleum Bhd is confident of getting the Securities Commission’s (SC) approval for its first qualifying acquisition to put it on track to complete the deal by the end of the year.
The special-purpose acquisition company (SPAC), which had on Aug 29 submitted its proposal for a US$281mil (RM895.2mil) deal to buy a 40% stake in the Thai unit of UK-listed Salamander Energy Plc to the SC, is expected to know the regulator’s decision by next month.
Stressing that the proposed transaction was a “good deal” for the company, Sona managing director Datuk Seri Hadian Hashim said that the deal had met all the criteria for what was to be its first qualifying acquisition.
“It is a good asset… it is earnings-accretive for us,” Hadian told a press conference after a luncheon talk on “Valuing Upstream Oil & Gas Assets” organised by MIDF Amanah Investment Bank Bhd.
Sona is one of three Malaysia-listed SPACs that have yet to secure a qualifying asset to “graduate” as full-fledged operating companies.
In July, it signed a deal to buy its first qualifying asset with Salamander. The proposed acquisition was expected to give Sona a 40% effective participating interest in the B8/38 and G4/50 oilfield concession in the Gulf of Thailand via its wholly owned subsidiary, Sona Exploration and Production (Thailand) Ltd.
Petroleum consulting company Gaffney, Cline & Associates had said the valuation of the proposed acquisition at around US$280mil was “fair and reasonable”.
“We are currently (actively) engaging the SC through our advisers to explain the deal,” Hadian said, adding that the proposal submitted to the SC last month was complete with a technical report, two independent valuation reports and all other due diligence reports pertaining to Sona’s first qualifying acquisition.
“Our target is to complete the deal by the end of the year,” he reiterated.
According to Sona, there is no concern over management control and operatorship of the group’s first qualifying asset, as the group would have joint control with Salamander over the key strategic, financial and operational decisions of Salamander Energy (Bualuang Holdings) Ltd, Salamander’s Thai unit. This had been clearly spelt out in all the agreements that they had signed, including the sale and purchase agreement, joint operating agreement and shareholders’ agreement.
Sona said the partnership was further guided by international global standards, as was the norm in the oil and gas industry.
“There are no uncertainties between us and Salamander,” Sona vice-president for business development Datuk Saw Choo Boon said.
Sona’s long-term view of the international oil prices is that they would remain “lucrative” and “favourable” to the group in the range of US$95 to US$100 per barrel.

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