Pan Orient Energy Entered into an Agreement to be Acquired by DIALOG Group

Source: www.gulfoilandgas.com 6/6/2022, Location: North America

Pan Orient Energy Corp. (“Pan Orient“) (POE) announced that it has entered into an agreement to be acquired by a subsidiary of DIALOG Group Berhad (7277 – Bursa Malaysia) and for Pan Orient’s non-Thailand business to be transferred to CanAsia Energy Corp. (“CanAsia“), a new company to be owned by Pan Orient shareholders.

Pursuant to that agreement (the “Arrangement Agreement“), DIALOG Systems (Asia) Pte Ltd., a wholly-owned subsidiary of DIALOG Group Berhad, will acquire, through a newly-incorporated Alberta subsidiary (the “Purchaser“), all the outstanding shares of Pan Orient by way of a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement“). A holder of a common share of Pan Orient will receive, for each such common share, cash consideration of USD $0.788 and one common share of CanAsia. The cash consideration is approximately CAD $0.991 at the current exchange rate. Pan Orient and DIALOG Group Berhad are at arm’s length to each other, and the Arrangement is not a related party transaction.

Pan Orient will transfer to CanAsia all of Pan Orient’s non-Thailand assets, including Pan Orient’s 71.8% ownership of Andora Energy Corporation (“Andora“) and approximately CAD $7.1 million in working capital and long-term deposits. CanAsia will assume all liabilities relating to the non-Thailand business, consisting primarily of accounts payable and accrued liabilities included in working capital, the decommissioning provision in Pan Orient’s financial statements, and transaction costs. Andora owns interests in oil sands leases at Sawn Lake in Northern Alberta where it developed a steam assisted gravity drainage pilot project that awaits financing, commercial development and operation.

The Arrangement must be approved by Pan Orient shareholders, the Court of Queen’s Bench of Alberta and the TSX Venture Exchange (the “TSXV“) and is expected to be completed in mid to late August 2022.

Pan Orient common shares will be delisted from the TSXV. It is anticipated that the CanAsia common shares will be listed on the TSXV as a substitutional listing to the Pan Orient common shares and that a new stock symbol will be allocated.

Highlights

- Summary:
- Pan Orient Energy Corp. will be acquired by a subsidiary of DIALOG Group Berhad of Malaysia
- Pan Orient’s non-Thailand business will be transferred to CanAsia Energy Corp., a new company to be owned by Pan Orient shareholders
- Included will be Pan Orient’s 71.8% ownership of Andora Energy Corporation and approximately CAD $7.1 million in working capital and long-term deposits
- Andora owns interests in oil sands leases at Sawn Lake in Northern Alberta where it developed a steam assisted gravity drainage pilot project
- Consideration: A holder of a common share of Pan Orient will receive:
- cash consideration of USD $0.788, and
- one common share of CanAsia
- Closing:
- Expected mid to late August 2022
- Shareholder, court and TSX Venture Exchange approvals are required
- Pan Orient common shares will be delisted from the TSXV; anticipated that CanAsia common shares will be listed on the TSXV

Pan Orient Director Approval and Recommendation; Fairness Opinion

The directors of Pan Orient, on the recommendation of an independent committee of directors, unanimously (a) determined that the Arrangement is in the best interests of Pan Orient and fair, from a financial point of view, to shareholders, (b) approved the Arrangement and the Arrangement Agreement, and (c) recommend that shareholders vote in favor of the Arrangement.

In making their determination, the directors relied in part on a verbal fairness opinion prepared by Research Capital Corporation. As of the date of the opinion, and subject to the limitations, qualifications and assumptions disclosed to the directors, Research Capital Corporation was of the opinion that the consideration to be received by Pan Orient shareholders under the Arrangement is fair, from a financial point of view, to shareholders. The verbal fairness opinion was delivered to an independent committee of directors. It is anticipated that a written fairness opinion, which will describe the assumptions made, factors, and other material background information considered and limitations and qualifications on the review undertaken, will be included in the Pan Orient management information circular described below.Pan Orient Shareholder and Court Approvals

The Arrangement requires approval by Pan Orient shareholders at a special meeting of shareholders expected to be held in mid-August 2022. Approval of the Arrangement must be obtained by a special resolution passed by a majority of not less than two-thirds of the votes cast by Pan Orient shareholders who vote in respect of the resolution. A management information circular containing full disclosure of the Arrangement is expected to be filed and made available to shareholders through Pan Orient’s issuer profile on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com by mid-July 2022.

The Arrangement must also be approved by the Court of Queen’s Bench of Alberta. An interim order of the Court will be applied for to prescribe certain procedural matters relating to the special meeting of shareholders, followed by an application for a final order to approve the Arrangement after the special meeting of shareholders. The Arrangement will become effective when articles of arrangement are filed with the Registrar of Corporations under the Business Corporations Act (Alberta).

Directors, officers, option holders and the largest shareholder of Pan Orient, who collectively hold 21.4% of the outstanding common shares, have entered into support agreements with the Purchaser. They have agreed to vote the Pan Orient common shares beneficially owned or controlled by them in favor of the Arrangement and to otherwise support the Arrangement and other related matters to be considered at the shareholder meeting. Each holder of stock options has also agreed in his respective support agreement to either (a) surrender his options for a cash payment equal to the in-the-money value of the options or for no cash consideration for out-of-the-money options, in accordance with the Arrangement, or, failing that, (b) exercise his in-the-money options.


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