KUALA LUMPUR: Reach Energy Bhd’s intention to buy a 60 per cent stake in Palaeontol BV in Kazakhstan hits a snag after its shareholders opted for adjournment of the extraordinary general meeting (EGM) yesterday.
Its managing director Shahul Hamid Mohd Ismail said the EGM had to be adjourned to within the next 30 days as there were proposals from the shareholders to do so.
“We presented proposals on the identified asset for the shareholders to look at and they (the shareholders) seemed keen on the acquisition but have requested for some time to look closely at the merits of the acquisition.
“There were of course reasonable doubts over the acquisition, but we are happy that they seemed keen on making the acquisition proposal a pass,” he said yesterday.
It was learnt that more than 50 per cent of shareholders requested for the adjournment.
The EGM was held after negotiations and discussions since October last year and is the
last hurdle for the special-pur-
pose acquisition company (SPAC) to overcome before the acquisition could materialise.
The SPAC needs to get at least 75 per cent of its shareholders’ approval for its qualifying acquisition (QA) to go through.
If it gets 75 per cent approval, Reach will become a full-fledged exploration and production oil and gas company.
The window for the proposal to be passed, however, is very small as the company has until next Thursday to decide or it has to request for further extension from Bursa Malaysia.
The firm would also have about a year to find another potential qualifying asset if the deal falls through.
Reach’s proposal was to buy a 60 per cent stake in Palaeontol, which is the owner of the onshore oil and gas field Emir-Oil LLP in Kazakhstan for US$154.9 million (RM650.58 million).
The vendor of the stake in Palaeontol is Hong Kong-listed MIE Holdings Corp, which plans to own the remaining 40 per cent in Palaeontol.
It was earlier reported that Reach will assume 60 per cent of Palaeontol BV’s outstanding shareholder loans under the acquisition.
Reach remained unchanged at 71.5 sen on a huge volume of 9.6 million shares yesterday.