Australian junior Far Ltd has again pushed back a shareholder meeting to approve the sale of its stake in the Sangomar development off Senegal, as it continues to assess a potential takeover proposal.

Far revealed it had pushed back the shareholder meeting to approve the sale of its stake in the Rufisque, Sangomar and Sangomar Deep (RSSD) joint venture to operator Woodside from 21 January until 18 February.

The meeting was originally scheduled for December last year, but Far pushed it back a month in the wake of a conditional non-binding indicative takeover proposal from Remus Horizons, a private investment fund regulated by the Guernsey Financial Services Commission.

However, the Remus proposal is conditional on Far cancelling its sale in the RSSD joint venture to Woodside.

Additional information

Far said on Friday it had elected to delay the shareholder meeting after obtaining additional information from Remus, including confirmation Remus is finalising the funding arrangements in advance of making the proposed offer.

Remus also confirmed that the only internal and regulatory approval needed to proceed with the offer was the final approval of its board and the final review and confirmation of documentation, while also stating that it did not require any further due diligence on Far to make its proposal.

It has also claimed that approval would not be required for any takeover from Australia’s Foreign Investment Review Board.

Waiting for firm proposal

Far stated that the delay of the shareholder meeting would allow more time for Remus to table a firm proposal, while also allowing more time to consider the sale of its RSSD stake to Woodside “on the basis of more detailed information”.

Far also indicated that it had no intention to delay the shareholder meeting beyond 18 February and revealed it was continuing to advance negotiations with Woodside in relation to the form of proposed contractual documentation related to the sale.

Far originally agreed to sell its 13.67% stake in the Sangomar exploitation area and a 15% interest in the RSSD exploration acreage to India’s ONGC Videsh late last year in a $166.6 million deal.

Woodside then exercised its pre-emptive rights over the deal to swoop in on the stake to take its participating interest to 82% for the Sangomar exploitation area and 90% for the RSSD exploration area.

Making up cash calls

The sale came after Far missed several cash calls as it struggled to gain financing to fund its share of the first phase of development at Sangomar, which was sanctioned early last year.

Far said on Friday it is in the process of paying the November 2020 cash call, of $8.96 million plus interest, and the December cash call, of $6.48 million plus interest, leaving the company with a cash position of $10.3 million.

Under its takeover proposal, Remus intends to make a $50 million working capital loan facility available to allow Far to make its future cash calls, however Far will not be obliged to enter into the facility, known as a bridge loan.

Far also noted that the terms of the proposed bridge loan have not been negotiated or finalised, while it also warned shareholders that Remus’ proposal was not currently a legally binding offer.

It added there was no certainty a binding proposal from Remus would eventuate, while the full terms of Remus’ planned offer are still currently uncertain.

In addition to its minority stake in the RSSD joint venture, Far also holds equity in acreage off the Gambia, Guinea-Bissau and Australia.

Field Development

Far pushes back Senegal sale as it assesses merits of potential takeover offer