Emas Offshore seeking legal advice on settlement agreement with Perisai

Lewek Constellation recently completed its first reel-lay operation in the US Gulf of Mexico under a contract with Noble Energy.
Lewek Constellation recently completed its first reel-lay operation in the US Gulf of Mexico under a contract with Noble Energy.PHOTO: EMAS OFFSHORE

SINGAPORE - Emas Offshore, a subsidiary of Ezra Holdings, announced on Sunday (Aug 20) that it is seeking legal advice after Perisai Petroleum Teknologi said it had regained the right to sell its 51 per cent stake in their joint venture, SJR Marine, following the lapse of a settlement agreement between the two companies.

SJR Marine is a single-purpose company that owns marine vessel Enterprise 3. Emas owns the other 49 per cent stake in SJR. Emas and Perisai had signed a contract in December 2012 that gave Perisai the right to exercise a put option to sell its 51 per cent stake in SJR to Emas for US$43 million. The put was originally exercisable on Nov 26.

In December last year, Emas agreed to avoid a protracted legal dispute with Perisai by entering into a settlement agreement relating to the US$43 million put option. Completion of the proposed settlement agreement was conditional upon satisfaction of certain conditions within a certain timeframe, or "long stop period".

In a filing with Bursa Malaysia on Aug 17, Perisai announced the final deadline to satisfy the conditions precedent under the settlement deal had passed.

It said Emas had on Aug 15 confirmed that it had not received any representation from OCBC which would allow Emas to conclude whether or not the conditions precedents would be satisfied. One of the conditions precedent was that Emas show Perisai it had obtained a US$20 million secured term loan facility from an existing bank lender to finance the purchase of the SJR shares.

Perisai said on Aug 17 that Emas confirmed that the long stop period be extended only up to July 23, 2017. As the long stop period has since lapsed, the proposed settlement agreement has been aborted, said Perisai.

According to Perisai, this means the put option granted by Emas to Perisai to sell its stake in SJR had therefore been revived, and it will seek to complete the put option within 30 days from Aug 17.

Emas said on Sunday it is "seeking legal advice in respect of the matters set out in the Perisai Announcement. The company will make further announcements in compliance with the listing requirements of the Oslo Bors when there are material developments."

Emas has dual listing in Oslo and Singapore.