Post by oldman on Dec 15, 2013 4:42:45 GMT 7
When the deal is completed, the vendors will own 33.7% of Asiasons while the company will still owe the vendors a further US$45 mil in cash. Asiasons will then have 1.467 billion shares in issue from the current 973 mil shares.
The vendors have valued Black Elk at US$482 mil as Asiasons is buying a 20% stake at US$96.4 mil. In the previous arrangement, Asiasons was to have taken 27.5% at US$171 mil valuing Black Elk then at US$622 mil. As the valuations were relative valuations based on the share price of Asiasons, one cannot really read too much more into the difference in the valuations then and now.
What is interesting is the inclusion of the cash component of US$45 mil and how it is structured. Basically, the delayed payment of this amount allows Asiasons to fully account for this acquisition while still owing the US$45 mil. Likely then that Black Elk will show positive results in the near term otherwise, I doubt Asiasons will agree to structure the deal this way. Yes, within 2 years time, Asiasons will still have to find a way of paying fully for this acquisition.
Whether Black Elk is a good investment is not within the scope of my quick analysis. Those interested in Asiasons will need to look closely at the financials of Black Elk beyond the statement in the earlier announcement that it lost US$25.2mil in the year before.
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The Board of Directors (the “Board”) of Asiasons Capital Limited (the “Company”) refers to its
announcement dated 17 October 2013 (“17 October Announcement”) wherein it advised
shareholders that it would engage Black Elk Energy Offshore Operations LLC and PPVA Black Elk
“Equity” LLC in revisiting and renegotiating the terms of the Proposed Acquisition previously
announced on 17 September 2013.
1. PROPOSED ACQUISITION
The Company now wishes to announce that the Company has entered into a non-binding term sheet
with PPVA Black Elk “Equity” LLC and PPVA Black Elk “Investor” LLC (collectively, the “Vendors”) on
12 December 2013 (the “Term Sheet”), under which the Company proposes to acquire units
representing approximately 20% of the total issued common units (the “Sale Units”) in the share
capital of Black Elk Energy Offshore Operations LLC (“Black Elk”) for a proposed total purchase
consideration (“Total Purchase Consideration”) of US$96,400,0000 (or S$120,500,000 based on
the exchange rate of US$1.00 to S$1.25 as agreed in the Term Sheet (“Agreed Exchange Rate”))
from the Vendor (the “Proposed Acquisition”) based on the indicative valuation of at least
US$482,000,000 set out as one of the conditions precedent to the Proposed Acquisition. The Sale
Units will comprise 272,260 Class A Units and 22,855,462 Class B Units.
The Total Purchase Consideration for the Proposed Acquisition is proposed to be satisfied by way of:-
(a) a cash consideration of US$45,000,000 (“Cash Consideration”), which shall be satisfied
on completion by the issuance of a promissory note by the Company to the Vendors, on
terms and conditions mutually acceptable by the Parties. The promissory note shall have
a tenure of two years, interest free and is non-transferable unless approved by the
Company; and
(b) the allotment and issue to the Vendors (and/or its nominee(s)) of 494,230,769 new
ordinary shares in the capital of the Company (“Consideration Shares”) for a total
consideration of US$51,400,000 (or S$64,500,000 based on the Agreed Exchange Rate)
at an issue price of S$0.13 (“Issue Price”) for each Consideration Share, fractional
entitlement be disregarded.
The Issue Price is at a premium to the closing price of S$0.123 on 6 December 2013.
The Vendors shall be jointly entitled to appoint one (1) director to the Board of the Company and the
Company shall be entitled to appoint one (1) director to the board of Black Elk.
In addition, the Company will pay to Fairfax Securities Corporation (trading as Jett Capital Advisors
LLC) upon successful completion of the Proposed Acquisition, an arranger fee equivalent to 5% of the
Total Purchase Consideration upon completion of the Proposed Acquisition, in the form of new
ordinary shares in the capital of the Company.
infopub.sgx.com/Apps?A=COW_CorporateAnnouncement_Content&B=AnnouncementLast3MonthsByCompanyNameAndCategory&F=1025324&fileId=ACL_TermSheet.pdf
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1. INTRODUCTION
The Board of Directors (the “Board”) of Asiasons Capital Limited (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that the Company had, on 16 September 2013, entered into:
(a) a subscription agreement (“Subscription Agreement”) with Black Elk Energy Offshore Operations LLC (“Black Elk”), for the subscription (the "Proposed Subscription") of 9,960,159 Class B Units (the "New Units") in Black Elk, for the total consideration of approximately US$50,000,000 (approximately S$63,500,000*) (the “Total Subscription Price”) payable in the form of the issue by the Company of 56,697,304 new ordinary shares in the capital of the Company (the “Subscription Consideration Shares”) to be allotted and issued to Black Elk, and
(b) a securities purchase agreement (“SPA”) with PPVA Black Elk “Equity” LLC (“Seller”), for the acquisition (the "Proposed Acquisition") of 24,233,220 Class B Units (the "Sale Units"), for the total consideration of US$121,650,764 (approximately S$154,496,470*) (the “Total Purchase Price”) payable in the form of the issue by the Company of 137,945,408 new ordinary shares in the capital of the Company (the “Vendor Consideration Shares”) to be allotted and issued to the Seller.
The aggregate of the Total Subscription Price and Total Purchase Price amount to US$171,650,764 (or approximately S$217,996,470) (the “Total Consideration”).
The Company, Black Elk and Seller shall collectively be referred to as the “Parties”.
* An exchange rate of US$1.00 = S$1.27 is used in this Announcement.
2. INFORMATION ON BLACK ELK
2.1 Black Elk Energy Offshore Operations, LLC engages in the acquisition, exploitation and development of oil and natural gas properties. Black Elk has producing assets located offshore in U.S. federal waters, and Louisiana and Texas state waters in the Gulf of Mexico. As of December 31, 2011, it held an aggregate net interest in approximately 293,400 net acres under lease, as well as an interest in 1,222 gross wells. Black Elk also has estimated total proved oil, natural gas, and NGL reserves of 45.2 MMBoe; and estimated net proved oil, natural gas, and NGL undeveloped reserves of 19.5 MMBoe. Black Elk produces approximately 14,000 barrels of oil per day.
2.2 Upon completion of the Proposed Subscription and Proposed Acquisition (subject to paragraph 3C below), the Company will own and hold approximately 27.5% of common voting units (comprising Class A Units and Class B Units) of Black Elk.
infopub.sgx.com/Apps?A=COW_CorporateAnnouncement_Content&B=AnnouncementLast3MonthsByCompanyNameAndCategory&F=963151&fileId=ACL_170913_Acquisition.pdf
The vendors have valued Black Elk at US$482 mil as Asiasons is buying a 20% stake at US$96.4 mil. In the previous arrangement, Asiasons was to have taken 27.5% at US$171 mil valuing Black Elk then at US$622 mil. As the valuations were relative valuations based on the share price of Asiasons, one cannot really read too much more into the difference in the valuations then and now.
What is interesting is the inclusion of the cash component of US$45 mil and how it is structured. Basically, the delayed payment of this amount allows Asiasons to fully account for this acquisition while still owing the US$45 mil. Likely then that Black Elk will show positive results in the near term otherwise, I doubt Asiasons will agree to structure the deal this way. Yes, within 2 years time, Asiasons will still have to find a way of paying fully for this acquisition.
Whether Black Elk is a good investment is not within the scope of my quick analysis. Those interested in Asiasons will need to look closely at the financials of Black Elk beyond the statement in the earlier announcement that it lost US$25.2mil in the year before.
---------------------
The Board of Directors (the “Board”) of Asiasons Capital Limited (the “Company”) refers to its
announcement dated 17 October 2013 (“17 October Announcement”) wherein it advised
shareholders that it would engage Black Elk Energy Offshore Operations LLC and PPVA Black Elk
“Equity” LLC in revisiting and renegotiating the terms of the Proposed Acquisition previously
announced on 17 September 2013.
1. PROPOSED ACQUISITION
The Company now wishes to announce that the Company has entered into a non-binding term sheet
with PPVA Black Elk “Equity” LLC and PPVA Black Elk “Investor” LLC (collectively, the “Vendors”) on
12 December 2013 (the “Term Sheet”), under which the Company proposes to acquire units
representing approximately 20% of the total issued common units (the “Sale Units”) in the share
capital of Black Elk Energy Offshore Operations LLC (“Black Elk”) for a proposed total purchase
consideration (“Total Purchase Consideration”) of US$96,400,0000 (or S$120,500,000 based on
the exchange rate of US$1.00 to S$1.25 as agreed in the Term Sheet (“Agreed Exchange Rate”))
from the Vendor (the “Proposed Acquisition”) based on the indicative valuation of at least
US$482,000,000 set out as one of the conditions precedent to the Proposed Acquisition. The Sale
Units will comprise 272,260 Class A Units and 22,855,462 Class B Units.
The Total Purchase Consideration for the Proposed Acquisition is proposed to be satisfied by way of:-
(a) a cash consideration of US$45,000,000 (“Cash Consideration”), which shall be satisfied
on completion by the issuance of a promissory note by the Company to the Vendors, on
terms and conditions mutually acceptable by the Parties. The promissory note shall have
a tenure of two years, interest free and is non-transferable unless approved by the
Company; and
(b) the allotment and issue to the Vendors (and/or its nominee(s)) of 494,230,769 new
ordinary shares in the capital of the Company (“Consideration Shares”) for a total
consideration of US$51,400,000 (or S$64,500,000 based on the Agreed Exchange Rate)
at an issue price of S$0.13 (“Issue Price”) for each Consideration Share, fractional
entitlement be disregarded.
The Issue Price is at a premium to the closing price of S$0.123 on 6 December 2013.
The Vendors shall be jointly entitled to appoint one (1) director to the Board of the Company and the
Company shall be entitled to appoint one (1) director to the board of Black Elk.
In addition, the Company will pay to Fairfax Securities Corporation (trading as Jett Capital Advisors
LLC) upon successful completion of the Proposed Acquisition, an arranger fee equivalent to 5% of the
Total Purchase Consideration upon completion of the Proposed Acquisition, in the form of new
ordinary shares in the capital of the Company.
infopub.sgx.com/Apps?A=COW_CorporateAnnouncement_Content&B=AnnouncementLast3MonthsByCompanyNameAndCategory&F=1025324&fileId=ACL_TermSheet.pdf
-------------
1. INTRODUCTION
The Board of Directors (the “Board”) of Asiasons Capital Limited (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that the Company had, on 16 September 2013, entered into:
(a) a subscription agreement (“Subscription Agreement”) with Black Elk Energy Offshore Operations LLC (“Black Elk”), for the subscription (the "Proposed Subscription") of 9,960,159 Class B Units (the "New Units") in Black Elk, for the total consideration of approximately US$50,000,000 (approximately S$63,500,000*) (the “Total Subscription Price”) payable in the form of the issue by the Company of 56,697,304 new ordinary shares in the capital of the Company (the “Subscription Consideration Shares”) to be allotted and issued to Black Elk, and
(b) a securities purchase agreement (“SPA”) with PPVA Black Elk “Equity” LLC (“Seller”), for the acquisition (the "Proposed Acquisition") of 24,233,220 Class B Units (the "Sale Units"), for the total consideration of US$121,650,764 (approximately S$154,496,470*) (the “Total Purchase Price”) payable in the form of the issue by the Company of 137,945,408 new ordinary shares in the capital of the Company (the “Vendor Consideration Shares”) to be allotted and issued to the Seller.
The aggregate of the Total Subscription Price and Total Purchase Price amount to US$171,650,764 (or approximately S$217,996,470) (the “Total Consideration”).
The Company, Black Elk and Seller shall collectively be referred to as the “Parties”.
* An exchange rate of US$1.00 = S$1.27 is used in this Announcement.
2. INFORMATION ON BLACK ELK
2.1 Black Elk Energy Offshore Operations, LLC engages in the acquisition, exploitation and development of oil and natural gas properties. Black Elk has producing assets located offshore in U.S. federal waters, and Louisiana and Texas state waters in the Gulf of Mexico. As of December 31, 2011, it held an aggregate net interest in approximately 293,400 net acres under lease, as well as an interest in 1,222 gross wells. Black Elk also has estimated total proved oil, natural gas, and NGL reserves of 45.2 MMBoe; and estimated net proved oil, natural gas, and NGL undeveloped reserves of 19.5 MMBoe. Black Elk produces approximately 14,000 barrels of oil per day.
2.2 Upon completion of the Proposed Subscription and Proposed Acquisition (subject to paragraph 3C below), the Company will own and hold approximately 27.5% of common voting units (comprising Class A Units and Class B Units) of Black Elk.
infopub.sgx.com/Apps?A=COW_CorporateAnnouncement_Content&B=AnnouncementLast3MonthsByCompanyNameAndCategory&F=963151&fileId=ACL_170913_Acquisition.pdf