KERRY Stokes’ Seven Group Holdings is set to buy Nexus Energy in a deal worth $180 million, after the company went into administration in June.
The offer price is enough to repay some senior debt and pay noteholders 74.5 cents in the dollar, as well as compensating creditors, of which Seven Group is the major one.
The company went into administration after shareholders rejected a takeover bid by Seven earlier this year which they said had undervalued the company – offering shareholders just two cents per share.
The Australian Broadcasting Corporation reported that Seven Group chief operating officer Ryan Stokes said there were no plans to refloat Nexus Energy, with the company to retain the current management team if the purchase was approved.
“There is probably $200 million in investments to realise value, that along with the heavy debt load is what prevented it from achieving those opportunities,” he was quoted as saying.
Nexus had planned to drill a well on its wholly-owned Longtom Gas Project in permit area VIC/L29, in the Gippsland basin, later this year.
But the company was forced to redefine the required scope of work and timing for future work on the project after an offshore facilities fault forced the company to suspend production at its Longtom gas processing facility in February.
Subsidiaries of the company responsible for the day-to-day running of company assets were allocated a $30 million cash advance facility in June by a Seven Group subsidiary, which in turn was allocated to the Nexus Energy Vic P54 and Nexus Energy WA subsidiaries.
Aside from Longtom, Nexus has interests in the Crux gas project and the Echuca Shoals exploration permit in the Browse Basin, off the WA coast.