20th Oct 2015 08:19
LONDON (Alliance News) - Jubilant Energy NV on Tuesday said it will hold an extraordinary meeting in early November for shareholders to vote on its proposal to cancel its shares from trading on AIM and accept a cash takeover offer from its largest shareholder.
Jubilant Energy NV said Jubilant Energy (Holdings) BV, which holds an 85% stake in the company, has made a cash offer of 0.60 pence per share to value the company at around GBP249.8 million.
Jubilant Energy NV shares were up 18% to 0.530p on Tuesday morning from 0.45p at Monday's close.
The offer is conditional on Jubilant Energy NV canceling its shares from AIM, which shareholders will need to approve at an extraordinary general meeting booked in for November 6. Shareholders will not vote on the proposed offer at the meeting but afterward will need to decide individually to accept it.
"The independent directors are making no recommendation to shareholders and DI holders as to whether to accept the offer. Your decision as to whether to accept the offer will depend upon your individual circumstances. If you are in any doubt as to what action you should take, you should seek your own independent advice," said Jubilant Energy NV in a statement Tuesday.
Jubilant Energy NV is an emerging oil and gas company operating in India and is part of the Jubilant Bhartia Group, a group that runs a diverse portfolio of businesses in the pharmaceutical, life sciences and healthcare sectors, whilst it also runs the largest Dominos Pizza franchise in India through Jubilant FoodWorks.
Jubilant Energy (Holdings) BV is owned and controlled by Jubilant Energy NV Non-Executive Co-Chairmen Syham Bhartia and Hari Bhartia.
The takeover offer follows on from Jubilant Energy NV's poor results in the year ended March 31, when it reported a huge USD134.8 million pretax loss from a USD3.4 million loss a year earlier. It booked a USD121.9 million impairment against its Deendayal and Sanand-Miroli blocks due to the delays in starting production, cost overruns, and lower-than-expected gas prices put in place by the Indian government.
That led Jubilant Energy NV to launch a review whereby it said it would consider all of its options including the potential sale of the company. The main problem the company is facing is its huge debt pile, which has sparked concerns about the company's ability to make repayments and have enough funding to fulfil its commitments.
Net debt at the end of March stood at USD514.4 million with a small cash balance of USD21.6 million. That debt figure is substantial bearing in mind the company only generated USD10.0 million in revenue in the year ended March 31.
To make matters worse, Jubilant Energy NV owes a further INR3.13 billion to the operator of the Deendayal block which has not been paid on account of "certain differences between the operator and the company", it said back in September.
By Joshua Warner; [email protected]; @JoshAlliance
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