KUALA LUMPUR (Nov 4): Reach Energy Bhd’s shareholders have voted to adjourn the company’s extraordinary general meeting (EGM) for 30 days, after a group of shareholders voted against its proposed qualifying acquisition (QA) of a 60% stake in an oilfield in Kazakhstan.
The adjournment of the EGM today came after those shareholders, who collectively hold some 208 million shares in the company, voted by proxy — via the group's chairman Izlan Izhab — against the planned buy.
The EGM was called in order for shareholders to decide on whether to allow Reach Energy to proceed with its maiden acquisition of a 60% stake in Palaeontol BV, the sole interest holder of Kazakhstan's Emir-Oil LLP, for US$154.9 million (RM638.2 million).
The conditional sales and purchase agreement for the QA, inked in March, would lapse on Nov 10 (next Thursday). Reach Energy needed 75% of its shareholders to vote yes, in order to pass the QA.
The SPAC's total issued and paid up capital amounted to 1.28 billion shares, so a rough calculation indicate the shareholders who voted against this, hold about 16% stake in the company.
Reach Energy's management team owns 20% or 255.6 million shares, though these are non-voting shares and so, they cannot vote during the EGM.
At a press conference after the EGM was adjourned, Reach Energy managing director Shahul Hamid Mohd Ismail said the SPAC’s shareholders were interested in approving the QA, but just needed more time to review the proposal.
"We presented the proposal, the shareholders looked at the QA, they are keenly interested. Generally, they feel it is a good acquisition and want to make sure this acquisition goes through, so they proposed it (the EGM) to be adjourned," he said.
Shahul said he is happy that shareholders were concerned whether the management would put in all efforts to ensure the acquisition was passed.
"We hope to convene another meeting as soon as possible; they (shareholders) have given us 30 days. Some shareholders wanted a bit more time to look at the QA and I think that is fair," he said.
However, Shahul noted that the SPA's longstop date or due date for the Emir-Oil acquisition is next Thursday. As such, he said the management may call for another EGM before then.
"I feel reluctant to negotiate for another extension — the deal has taken long enough. We started negotiations since October last year. Maybe the circular of the deal was only available on Oct 13 this year, so they (shareholders) may not have had enough time to study it — that's how I see it," he said.
"If they don't like the asset, they wouldn't ask for an adjournment. It is a positive adjournment. I think we piqued shareholders’ interest. They are very happy with this asset," he added.
Reach Energy closed unchanged at 71.5 sen today, giving it a market capitalisation of RM926.4 million.