TIDMCORO
RNS Number : 9516Z
Coro Energy PLC
27 May 2021
This announcement contains inside information
27 May 2021
Coro Energy plc
("Coro" or the "Company")
Disposal of Italian Portfolio
Coro Energy plc, the South East Asian energy company focused on
leading the regional transition to a low carbon economy, is pleased
to announce it has entered into a conditional Sale and Purchase
Agreement ("SPA") with Dubai Energy Partners, Inc ("DEPI") to
dispose of the Company's Italian portfolio (the "Italian
Portfolio") for cash consideration of EUR300,000 (the
"Disposal").
DEPI is incorporated in the United States of America and is
focused on the acquisition of producing, and shut-in, oil and gas
fields.
Highlights
-- DEPI will acquire the Company's entire interest in the
Italian Portfolio, through the acquisition by DEPI of the entire
issued share capital of the Company's wholly owned subsidiary Coro
Europe Limited ("Coro Europe") for a cash consideration of
EUR300,000, with a deposit of EUR30,000 payable on entry of the SPA
(non-refundable except in limited circumstances)
-- The economic effective date for the Disposal is 26 May 2021,
being the date of signing the SPA. DEPI will be entitled to any
profits, and responsible for any losses, from the Italian Portfolio
from this date
-- Completion of the Disposal is conditional on, inter alia,
approval by the Italian Ministry of Economic Development, with DEPI
assuming responsibility for any operational losses for the Italian
Portfolio from signature of the SPA until completion
-- The proceeds of the Disposal will be applied towards the
Group's energy transition strategy in South East Asia
Mark Hood, Chief Executive Officer, commented:
"We are pleased to agree a sale of our non-core Italian assets
to DEPI, who are ideally placed to take the portfolio forward. The
disposal allows us to prioritise our time and resources on our low
carbon and renewable energy strategy in South East Asia, which
continues to gain momentum. We look forward to updating
shareholders in due course."
Background to, and reasons for, the Disposal
On 12 September 2019, the Company announced that the Board of
Directors had taken the decision to prioritise full divestment of
the Italian Portfolio, given the Group's strategic focus on growth
in South East Asia.
Thereafter the Company entered into an agreement to dispose of
the Italian Portfolio, the terms of which were announced by the
Company on 3 December 2019 and approved by Coro shareholders at a
General Meeting held on 20 December 2019. However, the Company
subsequently announced on 31 July 2020 that, by mutual agreement of
the parties, this proposed transaction would not be proceeding due
to doubts about the likelihood of successfully completing that
transaction ahead of the 31 October 2020 long stop date.
Since prioritising the Italian Portfolio for divestment, the
Group has continued to recognise losses relating to Italian
operations. In the year to 31 December 2020 Coro Europe incurred a
loss after tax of $2.2m on revenues of $0.8 million, with the Group
providing $0.6m of funding to the Italian Portfolio during that
year. Coro Europe net assets as at 31 December 2020 were $0.5
million.
While the Board believes that the Italian portfolio is capable
of generating profits through targeted investment to increase
production and extend asset lives, the Group's strategic focus
continues to be South East Asia. The Board believes that
incremental capital expenditure on the Group's renewable energy
projects and the Duyung PSC represent a more value accretive use of
the Group's resources and, ultimately, has a greater possibility of
generating higher returns for shareholders than allocating
additional capital to the development of the Italian Portfolio. As
a result, the Group has continued to pursue divestment of the
Italian Portfolio as a priority.
Background to DEPI
DEPI was founded in the USA and is an international oil and gas
company focused on the acquisition of undervalued producing, and
shut-in, oil and gas fields.
Details of the Disposal
The Company's wholly owned subsidiary, Coro Energy Holdings Cell
A Limited, has entered into a binding, conditional Sale and
Purchase Agreement ("SPA") with DEPI for the disposal by the Group
of the entire issued capital of Coro Europe Limited, which holds
the Group's interests and liabilities in the Italian portfolio, for
a consideration of EUR300,000 (the "Disposal"). DEPI will pay a
deposit of EUR30,000 within three (3) days of SPA signing
(non-refundable except in limited circumstances), with the balance
of the consideration of EUR270,000 due on completion of the
Disposal. The proceeds of the Disposal will be applied towards the
Group's energy transition strategy in South East Asia.
Completion of the Disposal is conditional on certain conditions
having been satisfied or waived, including:
-- Receipt of required regulatory approvals from the Italian
authorities by 26 February 2022 (the "End Date", such date being
extendable by mutual consent of the parties); and
-- There not having occurred between the date of the SPA and the
date of Completion, a breach of a warranty which constitutes a
material adverse change, defined as an event, change or condition
that causes, or could reasonably be expected to cause, a reduction
in the consolidated net assets of the Coro Europe Group and its
subsidiaries of more than EUR1,000,000, excluding certain global
events.
The economic effective date of the Disposal is 26 May 2021,
being the date the SPA was entered into. As a result, DEPI will be
entitled to any profits, and will assume responsibility for any
losses up to an aggregate limit of EUR5 million, from the Italian
Portfolio from this date until the first to occur of Completion,
the End Date, or termination of the SPA in accordance with its
terms.
The SPA may be terminated by either party in the event that the
conditions precedent, completion obligations and/or undertakings
given for that party's benefit and standing to be satisfied on or
before the date of Completion are not met or waived.
Coro Energy plc Via Vigo Communications
Mark Hood Ltd
Cenkos Securities plc (Nominated Adviser) Tel: 44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Tennyson Securities (Broker) Tel: 44 (0)20 7186 9030
Peter Krens
Ed Haig-Thomas
Vigo Consulting Ltd (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Chris McMahon
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