Notice to Exercise Pre-emption Rights

RNS Number : 2422S

Scirocco Energy PLC

12 July 2022

 

12 July 2022

Scirocco Energy plc

("Scirocco Energy" or "the Company")

Notice to Exercise Pre-emption Rights

Scirocco Energy (AIM: SCIR), the AIM investing company  targeting attractive assets within the European sustainable energy and circular economy markets confirms that it has received formal notice from ARA Petroleum Tanzania Limited ("APT") that it is exercising its pre-emption rights with regards to Scirocco's proposed divestment of the Ruvuma asset ("Ruvuma") to Wentworth Resources plc ("Wentworth") in addition to a separate letter received from the Tanzania Petroleum Development Corporation ("TPDC") stating that it is considering exercising its statutory rights of first refusal in relation to the Ruvuma pursuant to Section 86(5) of the Petroleum Act 2015.

As communicated to the market by RNS on 13 June 2022, Scirocco had entered into an asset sale agreement to divest its 25% non-operated interest in Ruvuma to Wentworth for a total consideration of up to US$16 million, with completion of the transaction being subject to a number of conditions, including, inter alia, written waivers (a) from each of the Company's joint venture partners in relation to Ruvuma, APT and Aminex plc ("Aminex") (together, the "Ruvuma Partners"), from exercising their pre-emption rights in relation to the sale of the Company's interest and (b) from TPDC of their rights of first refusal in relation to the Ruvuma Asset pursuant to Section 86(5) of the Petroleum Act 2015. APT has now informed Scirocco that it is exercising its pre-emption rights under the terms of the Joint Operating Agreement associated with Ruvuma, dated 23 March 2006, which relate to the Company's entire interest in Ruvuma. As noted above, TPDC have also delivered a letter to the Company requesting a meeting to discuss the potential exercise of their statutory right of first refusal in connection with the Company's proposed divestment of Ruvuma.

The Company is now taking further Tanzanian legal and regulatory advice to understand the interaction of the correspondence received and the consequences for the proposed divestment before entering into discussions with each of APT, TPDC and Wentworth to confirm next steps. The Company's current expectations based on the advice received to date is that the commercial terms of the sale of Ruvuma will be the same as those agreed with Wentworth regardless of the exercise of pre-emption by partners or the sale being conducted to TPDC pursuant to any exercise of their right of first refusal. A further update will be provided in due course following completion of further discussions

Aminex, the other partner on the Ruvuma asset, continues to be entitled to exercise its own pre-emption right up until 16 July 2022. Therefore, any new arrangements will not be entered into until the final pre-emption position is known and are subject to ongoing discussions with ARA, TPDC and Wentworth.

Scirocco CEO, Tom Reynolds commented "The commercial terms of the previously announced divestment to Wentworth, which the board strongly endorsed and were approved by Scirocco's shareholders, will remain unchanged as a result of these developments. Current expectations based on local advice received are that these apply to any disposal regardless of counterparty. Scirocco and its advisers will work with all parties to deliver a timely completion of the transaction."

Inside Information

The information contained within this announcement is deemed by Scirocco to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 ("MAR"). On the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

For further information:

Scirocco Energy plc Tom Reynolds, CEO Doug Rycroft, COO	[phone]
Strand Hanson Limited, Nominated Adviser Ritchie Balmer / James Spinney / Rory Murphy	[phone]
WH Ireland Limited, Broker Harry Ansell / Katy Mitchell	[phone]
Buchanan, Financial PR Ben Romney / Jon Krinks	[phone]

 

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