13th May 2014 12:50
LONDON (Alliance News) - New World Oil & Gas PLC Tuesday said it has signed a sales agreement with shareholders at Al-Maraam Al-Ahliya Co for General Trading and Contracting LLC to become a 49% shareholder with a 60% economic interest in Al-Maraam for an initial payment of EUR1 million.
The oil and gas exploration and development company said the binding framework agreement is subject to a number of conditions, including due diligence on Al-Maraam.
The company said the deal also is subject to a put option linked to an announcement earlier this month that Kuwaiti businessman Muaaz Alfahaid, representing Al-Maraam Trading & Contracting Ltd, will acquire a 20% stake in Niel Petroleum for USD20 million.
The proceeds of the Alfahaid deal are to be used by Niel Petroleum for the final subscription payment to New World as part of an agreement by Niel Petroleum in September to invest USD25 million in New World for a 75% stake in the company.
The put option states that if Muaaz Alfahaid does not complete the subscription of 20% equity in Niel Petroleum, New World will have the option to transfer the shares it is acquiring in Al-Maraam to Alfahaid in exchange for EUR1 million, plus related expenses.
The company said a balance of the consideration for shares in Al-Maraam in the amount of EUR4 million will be payable after the completion of the subscription process.
"New World looks forward to setting up operations in Kuwait and applying its expertise to developing Al-Maraam's full potential," Chief Executive William Kelleher said in a statement. "We will continue to keep our shareholders informed of our progress on a regular basis at this transformational time for the company."
New World Oil & Gas shares were up 4.0% to 0.780 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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