29th Jan 2015 14:40
LONDON (Alliance News) - Active Energy Group PLC shares halved on Thursday after it responded to an investigation that was launched last November by the Minister of Aboriginal Affairs in Canada, regarding allegations about an economic development agreement between three northern Alberta Métis settlements and the company's Canadian forestry joint venture company.
The investigation is set to throw a spanner in the works for Active Energy, which reported Wednesday it had received three non-binding conditional offers for the joint venture company, KAQUO Forestry and Natural Resources Development Corp, in which Active Energy holds a 45% stake. Another 45% of KAQUO is held by the three settlements, with the final 10% held by the chairman of KAQUO, Ron Derrickson.
Active Energy shares dropped 49% to 4.74 pence per share on Thursday afternoon, having fallen on the news to 3.84p.
Active Energy said government minister, Jim Prentice, commissioned the investigation into the procedures followed by the three Alberta Métis settlements prior to entering into the joint venture with KAQUO.
Last July, the Peavine, Paddle Prairie and East Prairie Métis settlements agreed with Active Energy to form Kaquo Forestry and Natural Resources Development Corp to commercialize timber and other natural resources on 250,000 hectares of Métis land.
The announcement came in response to a report in The Edmonton Journal Wednesday, which said "more than one" formal complaint had been made by Metis settlement members concerning the deal.
The complaints allege three settlement councils breached the Métis Settlements Act and council policy by signing the joint-venture agreement last year with Active Energy.
Their allegations focus on issues such as failing to consult the membership and the agreement?s duration, according to the report in The Edmonton Journal.
Active Energy have said it "remains confident that its partners have at no time acted inappropriately in any way," adding that it "does not expect that the findings of the investigation will be adversely prejudicial to KAQUO's interests".
Active Energy welcomed the investigation and said it is set to "clear the air."
On Wednesday, Active Energy said the three offers it has received, in aggregate, amounted to around USD300 million and said it intended to accept one of the offers.
"The offers were received as a result of the pre-marketing roadshow, to subscribe for a non-controlling equity stake in a yet-to-be-incorporated subsidiary of KAQUO to commercialise approximately 108,000 hectares of the aforementioned Métis Settlements forestry assets," the company said Wednesday.
"AEG and KAQUO welcome this investigation, and understand that there are procedures which the Minister is forced to follow regardless of the substance of any written complaint which he may receive. We fully endorse the Premier's transparent and independent approach to this matter, which bodes well for us as a public company investing into Alberta," said Richard Spinks, chief executive of Active Energy Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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