LONDON, UK: Coro Energy plc, the South East Asian energy company, has entered into a conditional Sale and Purchase Agreement (SPA) with Dubai Energy Partners Inc. (DEPI) to dispose of the Company’s Italian portfolio for cash consideration of €300,000.
Dubai Energy Partners Inc. (DEPI) is incorporated in the United States of America and is focused on the acquisition of producing, and shut-in, oil and gas fields.
The economic effective date for the Disposal is 26 May 2021, being the date of signing the SPA. DEPI will be entitled to any profits, and responsible for any losses, from the Italian Portfolio from this date. The proceeds of the Disposal will be applied towards the Group’s energy transition strategy in South East Asia.
Mark Hood, Chief Executive Officer, commented: “We are pleased to agree a sale of our non-core Italian assets to DEPI, who are ideally placed to take the portfolio forward. The disposal allows us to prioritise our time and resources on our low carbon and renewable energy strategy in South East Asia, which continues to gain momentum. We look forward to updating shareholders in due course.”
On 12 September 2019, the Company announced that the Board of Directors had taken the decision to prioritise full divestment of the Italian Portfolio, given the Group’s strategic focus on growth in South East Asia.
Thereafter the Company entered into an agreement to dispose of the Italian Portfolio, the terms of which were announced by the Company on 3 December 2019 and approved by Coro shareholders at a General Meeting held on 20 December 2019.
However, the Company subsequently announced on 31 July 2020 that, by mutual agreement of the parties, this proposed transaction would not be proceeding due to doubts about the likelihood of successfully completing that transaction ahead of the 31 October 2020 long stop date.
Since prioritising the Italian Portfolio for divestment, the Group has continued to recognise losses relating to Italian operations. In the year to 31 December 2020 Coro Europe incurred a loss after tax of $2.2m on revenues of $0.8 million, with the Group providing $0.6m of funding to the Italian Portfolio during that year. Coro Europe net assets as at 31 December 2020 were $0.5 million.
While the Board believes that the Italian portfolio is capable of generating profits through targeted investment to increase production and extend asset lives, the Group’s strategic focus continues to be South East Asia. The Board believes that incremental capital expenditure on the Group’s renewable energy projects and the Duyung PSC represent a more value accretive use of the Group’s resources and, ultimately, has a greater possibility of generating higher returns for shareholders than allocating additional capital to the development of the Italian Portfolio. As a result, the Group has continued to pursue divestment of the Italian Portfolio as a priority.
DEPI was founded in the USA and is an international oil and gas company focused on the acquisition of undervalued producing, and shut-in, oil and gas fields.
Coro Energy Plc
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26 May, 4:55 pm GMT+1 · Disclaimer