This article first appeared in The Edge Financial Daily, on May 4, 2016.

KUALA LUMPUR: Hibiscus Petroleum Bhd has terminated its proposed acquisition of Australia-based Hydra Energy Holdings Pty Ltd (HEH) due to the non-fulfilment of certain condition precedents.

In a bourse filing yesterday, Hibiscus said it received an official reply from HEH on April 29 confirming that despite both company’s best efforts to proceed with the proposed exercise, HEH could not meet the Nov 9, 2015 term sheet conditions.

As such, the term sheet, dated Nov 9, 2015 in relation to the proposed acquisition, “is deemed terminated in view of non-fulfilment of the condition precedents (which included the parties agreeing and entering into the sale and purchase agreement and the approval of the shareholders of HEH to proceed with the proposed acquisition) before April 30, 2016”, Hibiscus’ filing read.

Neither party will be bound by any future obligations under the term sheet.

“The breaking fee of US$3.5 million (RM13.65 million) is not payable by Hibiscus as the approval of HEH’s shareholders was not obtained,” it added.

Nevertheless, Hibiscus reserves all other rights accruing to it pursuant to the term sheet, and does not foresee any material financial impact from the termination of the term sheet on its earnings or net assets per share.

Hibiscus fell half a sen to close at 18.5 sen yesterday, with a market capitalisation of RM203.9 million.