| Conclusion of an agreement obliging the Company to sell TOO EMBA YUG NEFT shares |
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| Own release | |
| 17.12.2011 | |
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The Management Board of PETROLINVEST S.A. (the “Company”) announces that on 16 December 2011, the Company and Conwell Oil Corporation B.V., a company with its registered seat in the Netherlands, (the “Buyer”), concluded an agreement whereby the Company is obliged to sell 79% of shares in TOO EMBA YUG NEFT, a company with its registered seat in the Republic of Kazakhstan (“EMBA”) (“EMBA Shares”), an entity of the PETROLINVEST S.A. Group (the “Agreement”).
The selling price of the EMBA Shares has been set at USD 35,000,000 less EMBA’s liabilities (including tax and regulatory liabilities, save for the liabilities associated with investment outlays under EMBA Contract No 976 of 29 June 2002). The Management Board of the Company estimates that the amount of price reduction will not exceed USD 4 million. Out of the entire price amount, USD 1,000,000 will be payable by the Buyer within 5 days of signing the Agreement as a down payment, while the remaining part will be payable after the transaction has been closed. The Parties have agreed that the sale of EMBA Shares shall be executed subject to the fulfilment of certain conditions precedent, inter alia, after the Parties to the Agreement have agreed upon the wording of the documents referring to the amendment of EMBA’s corporate documents, following the conclusion of an agreement on an escrow account where the remainder of the price amount will be deposited until the changes in EMBA’s ownership are registered, and after all the necessary permits have been obtained. The transaction shall be completed subject to the positive results of a due diligence examination of EMBA. In accordance with the Agreement, the aforementioned actions should be performed by 30 June 2012. During the aforementioned period, the Company has undertaken not to conduct negotiation with any third party other than the Buyer concerning the sale or transfer of EMBA Shares to such a third party. In the event of breach of this provision, the Company will be obliged to pay a contractual penalty to the Buyer in the amount of USD 10,000,000. In addition, the Company has undertaken to confirm that at the time of sale of EMBA Shares, the Company has no claims against EMBA, which means the obligation to release EMBA from the repayment of its liabilities against the Company. The aforementioned Agreement may be considered a significant agreement, as the aggregate value of its subject matter exceeds 10% of the Company's equity. |