18th Jan 2019 09:34
LONDON (Alliance News) - Path Investments PLC on Friday swung to loss in the first half of 2018 as it failed to reach a farm-in agreement with 5P Energy GmbH.
The energy investment company also separately said that it will buy ARC Marlborough Pty Ltd for undisclosed sum. ARC Marlborough owns a mining tenement in central Queensland, Australia.
Pretax loss in the six months to June 30, 2018, was GBP483,418 versus GBP73,048 profit reported in the same period in 2017.
The company did not generate any revenue as its activities were focussed on completing a farm-in agreement with 5P. The deal included the acquisition of a 50% stake in the Alfeld-Elze II licence and gas field in Germany.
In November, Path Investments said 5P decided not to continue with the farm-in agreement, as it was not possible to reach a deal with the vendors that would satisfy all the parties involved.
The deal was classified as a reverse takeover, therefore trading of the company's shares was suspended in December 2017.
"We were very disappointed that 5P decided not to complete the farm-in agreement, particularly when we had secured institutional funding to do so," said Chief Executive Christopher Theis.
Following the termination of the proposed transaction with 5P, Path Investments sought alternative investment opportunities, it said.
ARC Marlborough intends to develop the Queensland project to produce and supply nickel and cobalt products for use in the battery industry. Path Investments said that the acquisition will be funded through the issue of shares.
The company's shares will remain suspended in London and Path Investments said it will seek readmission upon completion of the transaction. The parties intend to proceed as quickly as possible, the company noted, however, there can be no certainty that the acquisition will be successfully completed.
"Nevertheless, we are delighted to have entered into the heads of agreement with ARC. We believe the proposed transaction is one that can deliver significant value for Path shareholders," said Theis.
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