KUALA LUMPUR (Dec 9): Perisai Petroleum Teknologi Bhd, which declared it was insolvent in October after failing to meet bond obligations, is in dispute with its shareholder Emas Offshore Ltd (EOL) over the disposal of a 51% stake in SJR Marine (L) Ltd to EOL.
Through several bourse filings today, Perisai said it has the right to dispose of its stake in SJR Marine to EOL for US$43.03 million, in accordance to agreements it inked with EOL previously.
However, EOL claimed that following the occurence of "certain events", it has the right to terminate the agreement with Perisai and buy the stake for US$1. EOL has an 11.48% stake in Perisai. It is also Perisai's joint venture partner in SJR Marine, with a 49% stake.
On Nov 30, 2012, Perisai and EOL inked a share sale agreement that provides for call and put options to the parties over the 51% equity interest held by Perisai in SJR Marine.
The call option was granted to EOL and gave it the right to acquire Perisai’s 51% stake in SJR Marine, a right that has since lapsed as it was not exercised within the option period. But the put option remains active and grants Perisai the right to sell its 51% stake in SJR Marine to EOL.
Perisai said it has issued a notice on Dec 8 that it is exercising the put option, which it said was irrevocably and unconditionally granted by EOL under the agreement, which also set the price of the option shares at US$43.03 million.
However, on the same day, Perisai received a letter from EOL notifying it that following the occurrence of certain alleged events, it intends to terminate the agreement with Perisai.
“Perisai has sought preliminary legal advice on the EOL notice and has on the same day, replied to EOL that Perisai disputes the claims under the EOL notice and that EOL is not entitled to issue the same.
“Perisai intends to continue to defend and deny all allegations that events supporting the right of EOL to terminate the agreement has occurred or that any termination of the agreement is or has been supported by any provisions of the agreement,” read Perisai’s announcement.
The announcement did not state what the events alleged by EOL were.
EOL is a subsidiary of Singapore-Exchange (SGX) listed oil and gas services provider Ezra Holdings Ltd, the single largest shareholder in Perisai with a 22.5% stake held through EOL and another unit.
Like Perisai, Ezra too has been hard hit by the O&G slowdown and warned last month of "going concern issue" as it reported a loss of US$887.75 million on huge impairments for its financial year ended Aug 31, 2016.
In a statement on its website, EOL confirmed it had issued a notification of termination of its agreement with Perisai due to certain breaches by Perisai, which it said were not remedied within the stipulated period set out in the agreement. It is also terminating a shareholders agreement inked in 2013 to regulate the relationship among Perisai, EOL and SJR in the JV.
It said upon termination of the agreements, the put option will be extinguished and that Perisai is required to sell its 51% stake in SJR to EOL.
“Pursuant to the terms, and upon termination of the shareholders agreement, Perisai is required to sell its 51% shares in SJR to EOL. EOL will acquire these shares at the price of US$1 which completion shall take place on the 30th day from the receipt of the termination notice,” read EOL’s statement.
Perisai became the first Malaysian oil and gas company to fall victim to the slump in oil prices and declared itself insolvent on Oct 12, after it could not pay the principal and interest of a S$125 million bond issued by its wholly-owned subsidiary Perisai Capital (L) Inc.
Trading in Perisai’s shares were halted from 3.44 pm today, and will resume on Tuesday.