TIDMAAK
RNS Number : 8177L
Arawak Energy Limited
16 January 2009
Not for release, publication or distribution, in whole or in part, in or into or
from Australia OR Japan OR any OTHER jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction.
FOR IMMEDIATE RELEASE
16 January 2009
RECOMMENDED AND INCREASED CASH OFFER
for
ARAWAK ENERGY LIMITED
by
ROSCO S.A.
(a member of the Vitol Group)
Summary
- The boards of Rosco S.A. and Arawak Energy Limited ("Arawak") are pleased
to announce that they have reached agreement on the terms of a recommended and
increased pre-conditional cash offer to be made by Rosco S.A. (or a wholly owned
subsidiary of Rosco S.A. designated by Rosco S.A. to make the offer) ("Rosco")
to acquire the entire issued and to be issued share capital of Arawak (the
"Increased Recommended Offer").
- The Increased Recommended Offer is being made at a price of CAD 1.00 for
each Arawak Share, equivalent to 54.7 pence per Arawak Share (based on a
currency exchange rate of CAD 1.8288 to GBP1.00 (being the Bloomberg Rate as at
5.00 pm (London time) on 15 January 2009)).
- The Increased Recommended Offer values the entire issued share capital of
Arawak at approximately CAD 182.6 million (GBP99.9 million).
- The price to be paid under the Increased Recommended Offer represents a
premium of approximately:
- 176 per cent. to the London Stock Exchange closing middle market price of
19.8 pence per Arawak Share; and
- 186 per cent. to the Toronto Stock Exchange closing price of CAD 0.35 per
Arawak Share,
in each case on 27 October 2008, the last business day prior to the date of the
Original Announcement; and
- 11.1 per cent. to the Original Offer Price of CAD 0.90 per Arawak Share
made in the Original Announcement.
- The Arawak Directors, who have been so advised by RBC Capital Markets,
consider the terms of the Increased Recommended Offer to be fair and reasonable.
In determining whether to recommend the transaction, the Arawak Directors
considered a number of factors and have relied in part on advice from RBC
Capital Markets to the effect that the consideration to be received by the
Arawak Shareholders pursuant to the Increased Recommended Offer is fair and
reasonable to such holders. In providing advice to the Arawak Directors, RBC
Capital Markets has taken into account the commercial assessments of the Arawak
Directors.
- Accordingly, the Arawak Directors unanimously recommend that Arawak
Shareholders accept the Increased Recommended Offer. The Arawak Directors have
irrevocably undertaken to accept (or, where applicable, procure the acceptance
of) the Increased Recommended Offer in respect of their entire shareholdings in
Arawak (including any Arawak Shares they are "interested" in, as defined in the
Code), such shareholdings comprising in aggregate 4,801,767 Arawak Shares
representing approximately 2.63 per cent. of the issued share capital of Arawak,
on the terms of the Directors' Irrevocable Undertakings. Mancal Corporation (a
company associated with one of the Arawak Directors) has also irrevocably
undertaken to accept the Increased Recommended Offer in respect of the 4,484,009
Arawak Shares held by it (representing approximately 2.46 per cent. of the
issued share capital of Arawak), on terms substantially the same as the
Directors' Irrevocable Undertakings.
- A currency exchange facility will be made available to Arawak Shareholders
under which they will be able to elect to receive their consideration in pounds
sterling at the Bloomberg Rate on the date three business days prior to the
relevant payment date. No commission will be charged for using this facility.
- The posting of the Offer Document is pre-conditional on certain regulatory
clearances being obtained.
Commenting on the Increased Recommended Offer, Mr. James H Coleman, Chairman of
the board of Arawak, said:
"We are pleased to have negotiated an acceptable path forward with Rosco. The
enhanced terms of the offer will permit Arawak shareholders to take advantage of
this cash offer on a timely basis."
This summary should be read in conjunction with the full text of this
Announcement.
The Offer will be subject to the applicable requirements of the Code and
Canadian securities laws. The Offer Document and Form of Acceptance will contain
the full terms and conditions of the Offer and will be posted to Arawak
Shareholders as soon as practicable.
The Pre-Condition and Conditions to, and certain further terms of, the Offer are
set out in Appendix I to this Announcement. Appendix II contains sources and
bases of certain information contained in this Announcement. Capitalised terms
have the meanings given to them in Appendix III to this Announcement.
In accordance with Rule 2.10 of the Code, Arawak confirms that is has
182,644,452 common shares of no par value in issue and admitted to trading on
the London Stock Exchange and the Toronto Stock Exchange. The International
Securities Identification Number for Arawak's common shares is ISIN:
JE00B2QY9G86.
Enquiries
+-------------------------------------+-------------------------------------+
| Kingsdale Shareholders Services | Tel: |
| Inc. (information agent appointed | within North America: + |
| by Rosco) | 1-800-775-5159 |
| | outside North America: + |
| | 1-416-867-2272 |
+-------------------------------------+-------------------------------------+
| Arawak Energy Limited | Tel: +44 20 7973 4285 |
| Alastair McBain | |
| Charles Carter | |
| Tanya Pang | |
+-------------------------------------+-------------------------------------+
| RBC Capital Markets | Tel: +44 20 7653 4804 |
| Andrew Smith | |
| Sarah Wharry | |
+-------------------------------------+-------------------------------------+
Credit Suisse, which is authorised and regulated in the UK by the Financial
Services Authority, is acting for Rosco and no one else in connection with the
Offer and will not be responsible to anyone other than Rosco for providing the
protections afforded to clients of Credit Suisse nor for providing advice in
relation to the Offer or any other matters referred to herein. Neither Credit
Suisse nor any of its subsidiaries, branches or affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Credit Suisse in connection with this Announcement, any
statement contained herein or otherwise.
RBC Capital Markets, which is authorised and regulated in the UK by the
Financial Services Authority, is acting for Arawak and no one else in connection
with the Offer and will not be responsible to anyone other than Arawak for
providing the protections afforded to clients of RBC Capital Markets nor for
providing advice in relation to the Offer or any other matters referred to
herein. Neither RBC Capital Markets nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of RBC Capital Markets in
connection with this Announcement, any statement contained herein or otherwise.
This Announcement does not constitute an offer to sell or an invitation to
purchase or subscribe for any securities or the solicitation of an offer to buy
or subscribe for any securities pursuant to the Offer or otherwise. The Offer
will be made solely by the Offer Document and the Form of Acceptance
accompanying the Offer Document, which will contain the full terms and
conditions of the Offer, including details of how the Offer may be accepted.
This Announcement has been prepared in accordance with English law, Canadian law
and the Code and the information disclosed may not be the same as that which
would have been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside England and Canada.
The laws of the relevant jurisdictions may affect the availability of the Offer
to persons who are not resident in the United Kingdom or Canada. Persons who are
not resident in the United Kingdom or Canada or who are subject to laws of any
jurisdiction other than the United Kingdom or Canada, should inform themselves
about, and observe, any applicable requirements. Any person (including nominees,
trustees and custodians) who would, or otherwise intends to, forward this
Announcement, the Offer Document and the Form of Acceptance or any accompanying
document to any jurisdiction outside the United Kingdom or Canada should refrain
from doing so and seek appropriate professional advice before taking any action.
The Offer will not be made, directly or indirectly, in or into or by use of the
mails or any other means or instrumentality (including, without limitation,
telephonic or electronic) of interstate or foreign commerce of, or any facility
of a national, state or other securities exchange of Australia or Japan and the
Offer will not be capable of acceptance by any such use, means, instrumentality
or facility or from within Australia or Japan. Accordingly, copies of this
Announcement and formal documentation relating to the Offer are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded, distributed
in or into or from Australia or Japan and persons receiving this Announcement
(including custodians, nominees and trustees) must not distribute or send it
into or from Australia or Japan. Doing so may render invalid any related
purported acceptance of the Offer.
This Announcement may contain various "forward-looking statements" relating to
the Offer and/or Rosco, that are subject to risks and uncertainties, including
those pertaining to the anticipated benefits to be realised from the proposed
acquisition of Arawak. Information in this Announcement relating to the Arawak
Group has been compiled from public sources. The statements can be identified by
the use of forward-looking terminology, such as "believe", "expects",
"prospect", "estimated", "should", "may" or the negative thereof, or other
variations thereof, or comparable terminology indicating Rosco's and/or Arawak's
expectations or beliefs concerning future events. Rosco cautions that such
statements are qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements. Other factors
could also cause actual results to differ materially from expected results
included in the statements. These factors include changes in regulatory
environment, foreign political, economic and currency risks associated with the
integration of recently acquired companies.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1% or more of any class of "relevant
securities" of Arawak, all "dealings" in any "relevant securities" of Arawak
(including by means of an option in respect of, or a derivative referenced to,
any such "relevant securities") must be publicly disclosed by no later than 3.30
pm (London time) on the London business day following the date of the relevant
transaction. This requirement will continue until the date on which the Offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the "offer period" otherwise ends. If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of Arawak, they will
be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Arawak by Rosco or Arawak, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
Not for release, publication or distribution, in whole or in part, in or into
or from Australia OR Japan OR any OTHER jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction.
FOR IMMEDIATE RELEASE
16 January 2009
RECOMMENDED AND INCREASED CASH OFFER
for
ARAWAK ENERGY LIMITED
by
ROSCO S.A.
(a member of the Vitol Group)
1. Introduction
The boards of Rosco and Arawak are pleased to announce that they have reached
agreement on the terms of a recommended and increased pre-conditional cash offer
to be made by Rosco to acquire the entire issued and to be issued common share
capital of Arawak.
2. The Increased Recommended Offer
On 28 October 2008, Rosco announced a pre-conditional cash offer for Arawak on
the basis of CAD 0.90 per Arawak Share. Following discussions between the boards
of Arawak and Rosco, this has been superseded by the Increased Recommended
Offer.
The Increased Recommended Offer, which will be subject to the Pre-Condition,
Conditions and the further terms set out below and in Appendix I and the full
terms and conditions which will be set out in the Offer Document and the Form of
Acceptance, will be made on the following basis:
for each Arawak Share CAD 1.00 (54.7 pence*) in cash
*Based on a currency exchange rate of CAD 1.8288 to GBP1.00 (being the Bloomberg
Rate as at 5.00 pm (London time) on 15 January 2009).
The Increased Recommended Offer price of CAD 1.00 per Arawak Share values the
entire issued share capital of Arawak at approximately CAD 182.6 million
(GBP99.9 million). Arawak Shares will be acquired under the Increased
Recommended Offer with the right to receive any dividend declared, made or paid
on or after 28 October 2008.
The price to be paid in the Increased Recommended Offer represents a premium of
approximately:
- 176 per cent. to the London Stock Exchange closing middle market price of
19.8 pence per Arawak Share;
- 186 per cent. to the Toronto Stock Exchange closing price of CAD 0.35 per
Arawak Share;
in each case on 27 October 2008, the last business day prior to the date of the
Original Announcement; and
- 11.1 per cent. to the Original Offer Price of CAD 0.90 per Arawak Share
made in the Original Announcement.
A currency exchange facility will be made available to Arawak Shareholders under
which they will be able to elect to receive their consideration in pounds
sterling at the Bloomberg Rate on the date three business days prior to the
relevant payment date. No commission will be charged for using this facility.
3. Recommendation
The Arawak Directors, who have been so advised by RBC Capital Markets, consider
the terms of the Increased Recommended Offer to be fair and reasonable. In
determining whether to recommend the transaction, the Arawak Directors
considered a number of factors and have relied in part on advice from RBC
Capital Markets to the effect that the consideration to be received by the
Arawak Shareholders pursuant to the Increased Recommended Offer is fair and
reasonable to such holders. In providing advice to the Arawak Directors, RBC
Capital Markets has taken into account the commercial assessments of the Arawak
Directors.
Accordingly, the Arawak Directors unanimously recommend that Arawak Shareholders
accept the Increased Recommended Offer. The Arawak Directors have irrevocably
undertaken to accept (or, where applicable, procure the acceptance of) the
Increased Recommended Offer in respect of their entire shareholdings in Arawak
(including any Arawak Shares they are "interested" in, as defined in the Code),
such shareholdings comprising in aggregate 4,801,767 Arawak Shares representing
approximately 2.63 per cent. of the issued common share capital of Arawak.
4. Irrevocable Undertakings
Rosco has received irrevocable undertakings from all of the Arawak Directors and
Mancal Corporation (a company associated with one of the Arawak Directors) to
accept (or, where applicable, procure the acceptance of) the Increased
Recommended Offer in respect of their entire shareholdings in Arawak (including
any Arawak Shares they are "interested" in, as defined in the Code), such
shareholdings comprising in aggregate 9,285,776 Arawak Shares representing
approximately 5.08 per cent. of the issued common share capital of Arawak.
Each of the undertakings by the Arawak Directors and Mancal Corporation requires
the relevant party to accept the Increased Recommended Offer (or, where
applicable, procure the acceptance of the Offer) in relation to their entire
shareholdings in Arawak (including any Arawak Shares they are "interested" in,
as defined in the Code), within 14 days of posting of the Offer Document, unless
prior to such date a third party has announced a competing offer which the
Arawak board determined in good faith represents an improvement of at least 10
per cent. over the consideration under the Increased Recommended Offer and which
is not at least matched by Rosco. The undertakings also lapse in the event that,
following delivery of the independent valuation referred to in paragraph 11
below, RBC Capital Markets has advised the Arawak board, having regard only to
the valuation, that they are no longer of the opinion that the Increased
Recommended Offer is fair and reasonable to shareholders and, having regard only
to such advice and the valuation, the Arawak board resolves to withdraw,
withhold, qualify or modify the recommendation in order for the Arawak Directors
to comply with their fiduciary duties.
5. Support Agreement, break fee and facility agreement
On the date of this Announcement, Arawak and Rosco have entered into the Support
Agreement which contains, among other things, certain assurances, undertakings
and confirmations between the parties relating to the implementation of the
Increased Recommended Offer. These include an undertaking from Arawak not to
solicit or facilitate a competing proposal unless the Arawak board considers
such proposal to represent an increase of at least 10 per cent. over the
Increased Recommended Offer and that failure to recommend such proposal would be
inconsistent with the Arawak Directors' fiduciary duties.
Arawak has further agreed, subject to the terms of the Support Agreement, to pay
Rosco a break fee of approximately CAD 1.83 million in certain circumstances,
including: (i) in certain circumstances in the event of an unsolicited bona fide
competing offer which exceeds the value of the Offer by more than 10 per cent.
that is not at least matched by Rosco; (ii) in the event Arawak breaches the
various undertakings contained in the Support Agreement to recommend (and
continue to recommend) the Increased Recommended Offer (other than in
circumstances where following delivery of the valuation referred to in paragraph
11 below, RBC Capital Markets has advised the Arawak board, having regard only
to the valuation, that they are no longer of the opinion that the Increased
Recommended Offer is fair and reasonable to shareholders and, having regard only
to such advice and the valuation, the Arawak board resolves to withdraw,
qualify, withhold or modify the recommendation in order for the Arawak Directors
to comply with their fiduciary duties); and/or (iii) in the event its Rule 3
adviser withdraws its consent to being named in the Arawak board's
recommendation which results in the Support Agreement being terminated.
Pursuant to Rule 21.2 of the Code, Arawak and RBC Capital Markets have confirmed
to the Panel that they consider these arrangements to be in the best interests
of Arawak Shareholders.
In order to provide Arawak with additional working capital, Arawak has today
entered into an unsecured revolving credit facility with Rosco S.A. of up to
US$10,000,000 at an interest rate of 4% above LIBOR. Subject to the terms and
conditions in the facility agreement, this facility may be drawn down at any
time in the 364 days following the date of the agreement and is repayable in
full on the expiry of that period. The facility is also required to be repaid in
full if the Arawak board at any time withdraws its recommendation of the
Increased Recommended Offer.
6. Background to and reasons for the recommendation of the Increased
Recommended Offer
Arawak faced an extremely challenging environment during the fourth quarter of
2008 due to several factors, including the sharp decline in oil prices, higher
than expected export duties and taxes in both of its main producing
jurisdictions and the subsequent curtailment of production in its most prolific
fields in Kazakhstan. This has resulted in a significant reduction in revenue in
the short term.
In Kazakhstan, with the implementation of the new tax code effective 1 January
2009, the Arawak Directors believe that the Company will be able to recommence
shut-in production shortly. Based on the Arawak Directors' understanding of the
newly adopted code, Customs Export Duty (CED) will no longer be payable provided
that the new tax payments are made. The new tax code appears to result in
netbacks which are not significantly different to the tax treatment in earlier
years in a lower price environment, but payments under the new regime may result
in the tax stability of the Company's major producing fields being compromised.
CED issues from 2008, which may be material, also remain unresolved. While the
adoption of the new tax code provides welcome clarity, there may be further
challenges and the Arawak Directors believe the recent changes have resulted in
an increase in the overall risk profile in Kazakhstan.
In addition, the deterioration of global oil prices and in the overall business
environment in Kazakhstan have contributed to the Company's lender in Kazakhstan
reviewing the Company's facilities with them, with potential changes being made
to the Company's facilities in the short term, creating uncertainty as to cash
availability.
In the current uncertain financial markets, it is the board of Arawak's view
that a significant number of Arawak Shareholders may accept the Increased
Recommended Offer. It is Rosco's stated intention that if it receives sufficient
acceptances and applicable consents (if any), it will seek to procure the
de-listing of Arawak Shares from both the Toronto Stock Exchange and the London
Stock Exchange. Such action could create significant risk to those Arawak
Shareholders that elect not to participate in the Offer.
The board of Arawak has also taken into account the current low oil price
environment combined with difficulties in accessing debt or equity funding in
order to grow the business in the medium term. The Company has been able to
secure an increase in the Increased Recommended Offer of in excess of 11 per
cent. compared with the Original Offer Price, as well as a US $10 million
unsecured revolving loan facility from Rosco S.A. to cover working capital needs
resulting from the difficult trading conditions. Taking into consideration
potential strategic alternatives, the absence of any competing proposals and
advice provided by RBC Capital Markets, the board of Arawak has unanimously
concluded to recommend that Arawak Shareholders accept the Increased Recommended
Offer.
Pursuant to the Support Agreement the board of Arawak is entitled to withdraw or
change the recommendation to accept the Increased Recommended Offer in only
limited circumstances including if, following publication of the valuation of
the Company's shares required under Canadian securities laws (referred to in
paragraph 11 below), RBC Capital Markets has advised the Arawak board, having
regard only to the valuation, that they are no longer of the opinion that the
Increased Recommended Offer is fair and reasonable to shareholders and, having
regard only to such advice and the valuation, the Arawak board resolves to
withdraw, withhold, qualify or modify the recommendation in order for the Arawak
Directors to comply with their fiduciary duties. The recommendation may also be
withdrawn, subject to payment of the break fee referred to above, in certain
circumstances in the event of an unsolicited bona fide competing offer which
exceeds the value of the Offer by more than 10 per cent. that is not at least
matched by Rosco.
7. Background to and reasons for the Increased Recommended Offer
Rosco views Arawak as an attractive addition to the Vitol Group's portfolio of
businesses and an opportunity to further enhance the company's participation in
oil and gas exploration and production. Rosco believes that its knowledge of the
oil and gas sector combined with the skills and experience of the employees and
management of Arawak will provide a well positioned platform for continued
growth.
8. Information on Rosco
Rosco is a limited liability company incorporated under the laws of Switzerland
and currently holds 67,315,812 common shares in Arawak representing
approximately 36.86 per cent. of the entire issued share capital of Arawak.
Rosco is a wholly owned subsidiary of Vitol Holding S�rl, which is the holding
company under which most of the trading operations of the Vitol Group are held.
Vitol Holding S�rl is a wholly owned subsidiary of Vitol Holding B.V.
9. Information on the Vitol Group
The Vitol Group, through Rosco and Vitol B.V. (another subsidiary of Vitol
Holding B.V.), is the largest shareholder in Arawak, holding in aggregate
75,668,399 shares in Arawak (including the 67,315,812 common shares held by
Rosco) representing approximately 41.43 per cent. of all the issued common
shares in Arawak at the date of this Announcement.
The Vitol Group was founded in 1966 and started its business with the trading of
oil products. It is now an independent, privately owned group of trading
companies, with its core business in energy, particularly crude oil and oil
products. Other Vitol Group trading businesses include natural gas, sugar,
non-ferrous metals, coal, chemicals and power. Vitol Group is also active in
shipping, oil terminals and oil exploration and production. Vitol Group ships
approximately 200 million tonnes of oil per year and has revenues in excess of
US$100 billion.
The relationship between Arawak and Vitol Group extends back to 2002, when Rosco
first became a shareholder in a subsidiary of Arawak. Since such date Arawak and
Vitol Group have been party to a number of transactions, including transactions
in the course of trading and acquisitions/disposals.
The Vitol Group has held an interest in shares in the Arawak Group since 2002,
and is currently party to various ongoing commercial arrangements with the
Arawak Group, which are material to the business of the Arawak Group. These
include significant off-take arrangements in Russia and Kazakhstan (including
exclusive buying arrangements for Arawak's Kazakhstan branches), crude purchase
contracts in relation to Arawak's Saigak joint venture in Kazakhstan, crude oil
marketing arrangements in Russia and various administrative arrangements
including a license for Arawak to occupy the Vitol Group's London office.
Arawak, Rosco and Vitol B.V. are party to the Relationship Agreement which has
governed their relationship with effect from admission of Arawak to the Official
List. The principal purpose of the Relationship Agreement was to ensure that
Arawak is capable of carrying on business independently of Rosco and Vitol B.V.
and that transactions and relationships with Rosco and Vitol B.V. are at arm's
length and on normal commercial terms.
For more information on the Vitol Group visit www.vitol.com. Further information
on the above arrangements can also be found at www.arawakenergy.com.
10. Information on Arawak
Arawak is a multi-asset oil and gas production, development and exploration
group which has been active in the FSU since 1998 and has current operations in
Kazakhstan, Russia and Azerbaijan. Arawak's publicly stated intention is to
become the leading independent oil and gas company focused on the FSU and to
grow both organically and through acquisition.
Arawak was initially incorporated in Canada in 1987 as Iskut Gold Corporation
and was renamed Arawak Energy Corporation in 2003. In November 2006 Arawak began
trading its common shares on the main board of the Toronto Stock Exchange, in
April 2008 Arawak was renamed Arawak Energy Limited and in July 2008 Arawak
Shares were admitted to the Official List and the main market of the London
Stock Exchange. Arawak's shares now trade on both the Toronto Stock Exchange and
the London Stock Exchange under the symbol "AAK".
On 14 November 2008, Arawak announced revenues of US$93.6 million in the third
quarter of 2008, compared with US$95.6 million in the second quarter (Q3 2007
US$56.6 million); sales volumes up 16% at 1,179,689 barrels of oil equivalent
("boe") versus 1,018,824 boe in the third quarter 2007 (Q2 2008 1,041,663 boe):
a decrease in net income in the third quarter of 2008 to US$6.4 million (Q3
2007, US$7.8 million) after payments in Kazakhstan of US$5.4 million in taxes
and US$3.2 million in penalties/VAT, which may be recoverable, and basic
earnings per share of 3.5 US cents.
11. Valuation of Arawak
The Offer will be an insider bid under applicable Canadian securities regulation
as a result of Rosco being a significant shareholder of Arawak. Accordingly,
under applicable Canadian securities regulation, unless such requirement is
waived, a formal valuation of the securities that are the subject of the Offer
must be prepared by an independent valuator at Rosco's expense and be published
in conjunction with the Offer. Arawak has engaged Macquarie to conduct the
independent valuation of the Company's shares, which is expected to be completed
by mid-February. Under the Support Agreement Arawak has agreed to use its
commercially reasonable efforts to ensure that the formal valuation is provided
to Rosco by 10 February 2009.
In light of this requirement, the Panel has agreed that the normal period for
posting of the Offer Document under Rule 30.1 of the Code shall be extended,
where necessary, as described in paragraph 19 below.
12. Financing the Offer
Rosco expects to fund the consideration payable under the Offer by being put in
funds by the Vitol Group.
As required by the Code, Credit Suisse, financial adviser to Rosco, confirms
that it is satisfied that sufficient financial resources are available to Rosco
to enable it to satisfy in full the cash consideration payable under the Offer.
13. Compulsory acquisition and de-listing
If the Offer becomes or is declared unconditional in all respects and Rosco
receives sufficient acceptances under the Offer, it will be Rosco's intention,
subject to receipt of applicable consents (if any):
(a) to exercise its rights pursuant to the provisions of Articles 117 and 118
of the Companies Law to acquire compulsorily the remaining Arawak Shares to
which the Offer relates (construed in accordance with Part 18 of the Companies
Law);
(b) to procure that Arawak makes applications to the Toronto Stock Exchange
for the de-listing of Arawak Shares from such exchange; and
(c) to procure that Arawak makes applications to the UK Listing Authority for
the cancellation of listing of Arawak Shares on the Official List and to the
London Stock Exchange for the cancellation of admission to trading in Arawak
Shares on its market for listed securities. It is anticipated that such
cancellation would take effect no earlier than 20 business days prior to the
Offer becoming or being declared unconditional in all respects (provided that
Rosco has acquired, or agreed to acquire, Arawak Shares that, when aggregated
with the shareholdings of Rosco and Vitol B.V. carry 75% or more of the voting
rights of Arawak).
The UK Listing Authority may cancel Arawak's listing on the Official List of the
London Stock Exchange if it considers that there are special circumstances that
preclude normal regular dealings in them. This may include where the percentage
of Arawak Shares in public hands falls below minimum thresholds determined by
the Financial Services Authority.
De-listing from the London Stock Exchange and the Toronto Stock Exchange would
significantly reduce the liquidity and marketability of any Arawak Shares not
tendered to the Offer. In addition, if the Arawak Shares are de-listed from the
Official List of the London Stock Exchange, the Relationship Agreement would
terminate, removing the protections afforded under that agreement.
14. Regulatory issues
A. Russian Federation Pre-Condition
The posting of the Offer Document is subject to the Pre-Condition set out in
Appendix I relating to Rosco receiving approvals for the acquisition of Arawak
from the Federal Anti-Monopoly Service of the Russian Federation in respect of
anti-monopoly regulations.
B. Kazakhstan Subsoil Law
Under Article 71 of the Subsoil Law of Kazakhstan, the Republic of Kazakhstan
has the right of priority on the acquisition of shares in entities with
particular subsoil use rights. The Arawak Group has such subsoil use rights, and
it is not certain how this provision will be interpreted in the context of an
offer for a publicly listed and traded entity, such as Arawak.
It is possible that this provision may require Rosco, on the completion of the
Offer (on the assumption that the Offer is declared unconditional in all
respects), to offer any Arawak Shares that it acquires under the Offer to the
Republic of Kazakhstan on the same terms and conditions as the Offer.
If it is concluded that this is the correct interpretation and application of
Article 71 of the Subsoil Law of Kazakhstan, Rosco will make such an offer,
which may or may not be taken up by the Republic of Kazakhstan. Arawak
Shareholders who do not accept the Offer should be aware that if the Republic of
Kazakhstan did elect to take up such an offer, it could become a significant
shareholder in Arawak.
15. Arawak Share Option Schemes
If the Offer becomes or is declared unconditional in all respects, appropriate
proposals will be made in due course to participants in the Arawak Share Option
Schemes.
16. Management and employees
If the Offer becomes or is declared unconditional in all respects, Rosco intends
that the Arawak Group will continue to observe the existing contractual and
statutory employment rights, including pension rights, of all Arawak Group
employees as required by applicable law.
17. Disclosure of interests in Arawak
Save for the Arawak shares held by Rosco and Vitol B.V. referred to in paragraph
9 above, and the following options, all held by Mr Roland Favre, previously a
director of Arawak until April 2008 and currently a director of Rosco S.A.:
- options over 125,000 common shares in Arawak with an exercise price of CAD
2.10, and expiring on 23 March 2010
- options over 150,000 common shares in Arawak with an exercise price of CAD
2.94, and expiring on 10 May 2011; and
- options over 75,000 common shares in Arawak with an exercise price of CAD
2.69, and expiring on 18 June 2012,
as at 15 January 2009, the last practicable business day prior to this
Announcement, neither Rosco nor, so far as Rosco is aware, any person acting in
concert with Rosco, had an interest in or right to subscribe for relevant
securities of Arawak or had any short position in relation to relevant
securities of Arawak (whether conditional or absolute and whether in the money
or otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to purchase
or take delivery of any relevant securities of Arawak.
18. Overseas persons
The availability of the Offer to Arawak Shareholders who are not resident in the
United Kingdom or Canada may be affected by the laws of the relevant
jurisdiction. Such persons should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction.
19. Offer Document
It is expected that the Offer Document and the Forms of Acceptance, containing
the full terms and conditions of the Offer, will be posted as soon as
practicable, and in any event (save with the consent of the Panel) within seven
days, following the later of: (i) satisfaction or waiver by Rosco of the
Pre-Condition; and (ii) receipt of the formal valuation required pursuant to
Canadian securities laws and referred to in paragraph 11 above (or a waiver of
the requirement from applicable Canadian securities regulators to post such
valuation at the same time as the Offer Document). The Offer Document and Forms
of Acceptance will be made available to all Arawak Shareholders at no charge to
them.
20. General
The Offer will be subject to the applicable requirements of the Code and
Canadian securities laws.
In accordance with Canadian securities laws the Offer will remain open for at
least 35 days from the date of the Offer Document.
In deciding whether or not to accept the Offer in respect of their Arawak
Shares, Arawak Shareholders should rely on the information contained, and follow
the procedures described, in the Offer Document and the Form of Acceptance.
The Pre-Condition and Conditions to, and certain further terms of, the Offer are
set out in Appendix I to this Announcement. Appendix II contains sources and
bases of certain information contained in this Announcement. Appendix III
contains definitions used in this Announcement.
Credit Suisse, which is authorised and regulated in the UK by the Financial
Services Authority, is acting for Rosco and no one else in connection with the
Offer and will not be responsible to anyone other than Rosco for providing the
protections afforded to clients of Credit Suisse nor for providing advice in
relation to the Offer or any other matters referred to herein. Neither Credit
Suisse nor any of its subsidiaries, branches or affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Credit Suisse in connection with this Announcement, any
statement contained herein or otherwise.
RBC Capital Markets, which is authorised and regulated in the UK by the
Financial Services Authority, is acting for Arawak and no one else in connection
with the Offer and will not be responsible to anyone other than Arawak for
providing the protections afforded to clients of RBC Capital Markets nor for
providing advice in relation to the Offer or any other matters referred to
herein. Neither RBC Capital Markets nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of RBC Capital Markets in
connection with this Announcement, any statement contained herein or otherwise.
This Announcement does not constitute an offer to sell or an invitation to
purchase or subscribe for any securities or the solicitation of an offer to buy
or subscribe for any securities pursuant to the Offer or otherwise. The Offer
will be made solely by the Offer Document and the Form of Acceptance
accompanying the Offer Document, which will contain the full terms and
conditions of the Offer, including details of how the Offer may be accepted.
This Announcement has been prepared in accordance with English law, Canadian law
and the Code and the information disclosed may not be the same as that which
would have been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside England and Canada.
The laws of the relevant jurisdictions may affect the availability of the Offer
to persons who are not resident in the United Kingdom or Canada. Persons who are
not resident in the United Kingdom or Canada or who are subject to laws of any
jurisdiction other than the United Kingdom or Canada, should inform themselves
about, and observe, any applicable requirements. Any person (including nominees,
trustees and custodians) who would, or otherwise intends to, forward this
Announcement, the Offer Document and the Form of Acceptance or any accompanying
document to any jurisdiction outside the United Kingdom or Canada should refrain
from doing so and seek appropriate professional advice before taking any action.
The Offer will not be made, directly or indirectly, in or into or by use of the
mails or any other means or instrumentality (including, without limitation,
telephonic or electronic) of interstate or foreign commerce of, or any facility
of a national, state or other securities exchange of, Australia or Japan, and
the Offer will not be capable of acceptance by any such use, means,
instrumentality or facility or from within Australia or Japan. Accordingly,
copies of this Announcement and formal documentation relating to the Offer are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed in or into or from Australia or Japan and persons
receiving this Announcement (including custodians, nominees and trustees) must
not distribute or send it into or from Australia or Japan. Doing so may render
invalid any related purported acceptance of the Offer.
This Announcement may contain various "forward-looking statements" relating to
the Offer and/or Rosco, that are subject to risks and uncertainties, including
those pertaining to the anticipated benefits to be realised from the proposed
acquisition of Arawak. Information in this A nnouncement relating to Arawak
Group has been compiled from public sources. The statements can be identified by
the use of forward-looking terminology, such as "believe", "expects",
"prospect", "estimated", "should", "may" or the negative thereof, or other
variations thereof, or comparable terminology indicating Rosco's and/or Arawak's
expectations or beliefs concerning future events. Rosco cautions that such
statements are qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements. Other factors
could also cause actual results to differ materially from expected results
included in the statements. These factors include changes in regulatory
environment, foreign political, economic and currency risks associated with the
integration of recently acquired companies.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1% or more of any class of "relevant
securities" of Arawak, all "dealings" in any "relevant securities" of Arawak
(including by means of an option in respect of, or a derivative referenced to,
any such "relevant securities") must be publicly disclosed by no later than 3.30
pm (London time) on the London business day following the date of the relevant
transaction. This requirement will continue until the date on which the Offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the "offer period" otherwise ends. If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of Arawak, they will
be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Arawak by Rosco or Arawak, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
APPENDIX I
PRE-CONDITION, CONDITIONS AND FURTHER TERMS OF THE OFFER
The Offer will comply with the applicable rules of the Code and Canadian
securities laws, will be governed by English law and will be subject to the
jurisdiction of the courts of England and Wales. In addition, the Offer will be
subject to the terms and conditions to be set out in the Offer Document and Form
of Acceptance.
1. Pre-Condition of the Offer
The making of the Offer by the posting of the Offer Document and related Forms
of Acceptance will take place following the satisfaction or waiver by Rosco of
the following pre-condition:
- approval, in terms reasonably satisfactory to Rosco, of the Federal
Anti-Monopoly Service of the Russian Federation, with respect to the Offer,
having been obtained in accordance with Article 28.1.8 of the Russian Federal
Law of 26 July 2006 No. 135-FZ "On protection of competition".
Rosco shall be entitled to waive the above pre-condition at any time.
2. Conditions of the Offer
The Offer will, subject to the satisfaction or waiver of the pre-condition
referred to above, be made by Rosco conditional upon:
(i) valid acceptances of the Offer being received (and not, where permitted,
withdrawn) by not later than 3.00 pm (London time) on the first closing date of
the Offer (or such later time(s) and/or date(s) as Rosco may, subject to the
rules of the Code and Canadian securities laws, decide) in respect of such
number of Arawak Shares which, together with Arawak Shares acquired (pursuant to
the Offer or otherwise) by Rosco and/or any wholly owned subsidiary of Vitol
Holding B.V., will result in Rosco and any such wholly owned subsidiaries of
Vitol Holding B.V. holding Arawak Shares which together carry in aggregate more
than 50 per cent. of the voting rights then normally exercisable at a general
meeting of Arawak including for this purpose (to the extent, if any, required by
the Panel) any such voting rights attaching to any Arawak Shares that are
unconditionally allotted or issued before the Offer becomes or is declared
unconditional as to acceptances, whether pursuant to the exercise of any
outstanding subscription or conversion rights or otherwise. For the purposes of
this condition:
(a) Arawak Shares that have been unconditionally allotted but not issued
shall be deemed to carry the voting rights that they will carry upon issue;
(b) valid acceptances shall be deemed to have been received in respect of any
Arawak Shares which are treated for the purposes of Article 117 of the Companies
Law as having been acquired or contracted to acquire by Rosco by virtue of
acceptances of the Offer;
(c) with the consent of the Panel, valid acceptances received prior to the
satisfaction or waiver of all other Conditions shall be deemed not to have been
received until such time as all of the other Conditions have been satisfied or
waived;
(ii) no Third Party having intervened in any way and there not continuing to
be outstanding any statute, regulation or order of any Third Party in each case
which would or might be expected to:
(a) make the Offer or its implementation or the acquisition or proposed
acquisition by Rosco or any other member of the Wider Vitol Group of any shares
or control of Arawak, or any other member of the Wider Arawak Group, void,
unenforceable and/or illegal in any jurisdiction or otherwise directly or
indirectly restrain, restrict, prohibit, prevent, delay or otherwise interfere
with the implementation thereof, or impose additional conditions or obligations
with respect to the Offer or such acquisition or control, or otherwise
challenge, impede or hinder the Offer or its implementation, or require
amendment to the terms of the Offer or the acquisition or proposed acquisition
of any Arawak Shares by Rosco or by any other member of the Wider Vitol Group or
the acquisition of control of Arawak by Rosco;
(b) require, prevent, or delay the divestiture or alter the terms of any
proposed divestiture by Rosco or any other member of the Wider Vitol Group or by
Arawak or any other member of the Wider Arawak Group of all or any part of their
respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct any of their respective businesses or to own
or control any of their respective assets or properties or any part thereof;
(c) limit or delay the ability of any member of the Wider Vitol Group or any
member of the Wider Arawak Group to acquire or to hold or to exercise
effectively, directly or indirectly, all or any rights of ownership in respect
of the Arawak Shares or to exercise voting or management control over any member
of the Wider Vitol Group or any member of the Wider Arawak Group or the ability
of any member of the Wider Vitol Group to acquire or to hold or to exercise
effectively, directly or indirectly, all or any rights of ownership in respect
of the shares or other securities in, or to exercise voting or management
control over, any other member of the Wider Vitol Group;
(d) except pursuant to Part 18 of the Companies Law in connection with the
Offer, require any member of the Wider Vitol Group or of the Wider Arawak Group
to acquire, or to offer to acquire, any shares or other securities (or the
equivalent) or interest in any member of either group or any asset owned by any
third party;
(e) require, prevent or delay the divestiture or alter the terms envisaged
for any proposed divestiture by any member of the Wider Vitol Group of any
shares or other securities (or the equivalent) in Arawak;
(f) limit the ability of any member of the Wider Vitol Group or of the Wider
Arawak Group to conduct or integrate or co-ordinate its business, or any part of
it, with the businesses or any part of the businesses of any other member of the
Wider Vitol Group or of the Wider Arawak Group;
(g) result in any member of the Wider Arawak Group ceasing to be able to
carry on business under any name under which it presently does so; or
(h) otherwise materially adversely affect the business, assets, profits,
financial or trading position or prospects of any member of the Wider Arawak
Group or of the Wider Vitol Group,
and all applicable waiting and other time periods during which any Third Party
could intervene in such a way under the laws of any relevant jurisdiction having
expired, lapsed or been terminated;
(iii) approval, in terms reasonably satisfactory to Rosco, of the Federal
Anti-Monopoly Service of the Russian Federation, with respect to the Offer,
having been obtained in accordance with Article 28.1.8 of the Russian Federal
Law of 26 July 2006 No. 135-FZ "On protection of competition";
(iv) to the extent that Council Regulation (EC) 139/2004 of January 20, 2004
on the control of concentrations between undertakings ("ECMR") may be applied,
the European Commission indicating, in terms reasonably satisfactory to Rosco,
that in connection with the proposed acquisition of control of the Arawak Group
by Rosco, or any matter arising therefrom, it does not intend to initiate
proceedings under Article 6(1)(c) of the ECMR; or in the event that a request
under Article 9(2) of the ECMR has been made, the European Commission indicating
that it does not intend to make a referral of the proposed acquisition of
control of the Arawak Group by Rosco or any matter arising therefrom to one or
more competent authorities under Article (9)(1) of the ECMR;
(v) all necessary notifications, filings and applications having been made,
all regulatory and statutory obligations in any relevant jurisdiction having
been complied with, all appropriate waiting and other time periods (including
any extensions of such waiting and other time periods) under any applicable
legislation or regulations of any relevant jurisdiction including but not
limited to the United States Hart-Scott-Rodino Antitrust Improvements Act of
1976 having expired, lapsed or been terminated in each case in respect of the
Offer or the acquisition or proposed acquisition of any Arawak Shares or control
of Arawak or any other member of the Wider Arawak Group by any member of the
Wider Vitol Group or the carrying on by any member of the Wider Arawak Group of
its business;
(vi) all authorisations and determinations necessary or appropriate in any
relevant jurisdiction for or in respect of the Offer or the acquisition or
proposed acquisition of any Arawak Shares or control of Arawak or any other
member of the Wider Arawak Group by any member of the Wider Vitol Group or in
relation to the continuation of the business of any member of the Wider Arawak
Group having been obtained, in terms and in a form satisfactory to Rosco, from
all relevant Third Parties or (without prejudice to the generality of the
foregoing) from any persons or bodies with whom any member of the Wider Arawak
Group has entered into contractual arrangements that are material in the context
of the Wider Arawak Group taken as a whole and such authorisations and
determinations, together with all authorisations and determinations necessary or
appropriate for any member of the Wider Arawak Group to carry on its business,
remaining in full force and effect and there being no notice or intimation of
any intention to revoke or not renew or suspend, restrict or modify any of the
same in any such case in so far as is material in the context of the Wider Vitol
Group or Wider Arawak Group, as the case may be, in each case, taken as a whole;
(vii) there being no provision of any agreement, arrangement, licence,
permit, concession or other instrument or authorisation to which any member of
the Wider Arawak Group is a party, or by or to which any such member or any of
its assets is or are or may be bound, entitled or subject or any event or
circumstance, which, in each case as a consequence of the Offer or the
acquisition or proposed acquisition of any Arawak Shares or control of Arawak or
any other member of the Wider Arawak Group by any member of the Wider Vitol
Group or otherwise, would or might reasonably be expected to result in:
(a) any monies borrowed by, or any other indebtedness or liabilities (actual
or contingent) of, or any grant available to, any such member being or becoming
repayable or capable of being declared repayable immediately or prior to its
stated maturity, or the ability of any such member to borrow moneys or incur any
indebtedness being withdrawn or inhibited or becoming capable of being withdrawn
or inhibited;
(b) any such agreement, arrangement, licence, permit, concession or other
instrument or authorisation, or the rights, liabilities, obligations or
interests or business of any member of the Wider Arawak Group thereunder, or the
interests or business of any such member in or with any other person, firm,
company or body (or any arrangement or arrangements relating to any such
interests or business) being, or becoming capable of being, terminated or
adversely modified or affected or any onerous obligation or liability arising or
any adverse action being taken or arising thereunder;
(c) any member of the Wider Arawak Group ceasing to be able to carry on its
business under any name under which it presently does so;
(d) any asset or interest of or used by any member of the Wider Arawak Group
being or falling to be disposed of or changed or ceasing to be available to any
member of the Wider Arawak Group or any right arising under which any such asset
or interest could be required to be disposed of or could cease to be available
to any member of the Wider Arawak Group, in each case otherwise than in the
ordinary course of business;
(e) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member of the Wider Arawak Group or any such mortgage, charge or other
security interest (whenever created, arising or having arisen) becoming
enforceable or being capable of being enforced;
(f) the creation of any liability (actual or contingent) by any member of the
Wider Arawak Group otherwise than in the ordinary course of business; or
(g) the value of or the financial or trading position or prospects of any
member of the Wider Arawak Group being prejudiced or materially adversely
affected,
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit or other instrument or authorisation to which any
member of the Wider Arawak Group is a party or to which any member of the Wider
Group or any of its assets may be bound entitled or subject could result in any
of the events or circumstances as are referred to subparagraphs (a) to (g) of
this condition (vii);
(viii) save as disclosed in the annual report and accounts of Arawak for the
year ended 31 December 2007, as specifically referred to in the Prospectus or as
publicly announced to a Regulatory Information Service by or on behalf of Arawak
before 28 October 2008, no member of the Wider Arawak Group having since 31
December 2007:
(a) issued or agreed to issue or authorised or proposed the issue of
additional shares of any class, or of securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities or transferred or sold any shares out
of treasury (save as between Arawak and wholly owned subsidiaries of Arawak or
upon the exercise of rights to subscribe for Arawak Shares pursuant to the
exercise of options granted under any of the Arawak Share Option Schemes on or
prior to 27 October 2008) or redeemed, purchased or repaid any of its own shares
or other securities or reduced or made any other change to any part of its share
capital;
(b) recommended, declared, paid or made or proposed to recommend, declare,
pay or make any bonus, dividend or other distribution whether payable in cash or
otherwise (other than to Arawak or a wholly owned subsidiary of Arawak);
(c) save for transactions between members of the Arawak Group, acquired or
disposed of or transferred, mortgaged or charged or created any security
interest over (in each case other than in the ordinary course of business) any
assets or any rights, title or interest in any asset (including shares and trade
investments) or merged with or demerged any body corporate or authorised or
proposed or announced any intention to propose any such merger, demerger,
acquisition, disposal, transfer, mortgage, charge or security interest (other
than in the ordinary course of business);
(d) made or authorised or proposed or announced an intention to propose any
change in its loan capital or issued, authorised or proposed the issue of any
debentures;
(e) (save in the ordinary course of business or for transactions between
members of the Arawak Group) incurred or increased or become subject to any
indebtedness or liability (actual or contingent);
(f) entered into or varied or authorised the entry into or variation of any
agreement, transaction, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which:
(i) is of a long-term, onerous or unusual nature or magnitude or which
involves or could involve an obligation of such a nature or magnitude; or
(ii) could restrict the business of any member of the Wider Arawak Group or
Wider Vitol Group;
(g) entered into or varied the terms of any contract, agreement or
arrangement with any of the directors of Arawak or any other director or senior
executive of any member of the Wider Arawak Group;
(h) waived or compromised any claim;
(i) taken any corporate action or had any legal proceedings instituted or
threatened against it or petition presented or order (in each case which is not
discharged within 21 days) made, in each case in relation to the suspension of
payments, moratorium of any indebtedness, its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee, viscount in Jersey or similar
officer of all or any part of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(j) been unable, or admitted in writing that it is unable, to pay its debts
or having stopped or suspended (or threatened to stop or suspend) payment of its
debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business;
(k) proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme, or other benefit relating to the employment or
termination of employment of any employee of the Wider Arawak Group;
(l) made or agreed or consented to any change to the terms of the trust deeds
constituting the pension schemes established for its directors, employees or
their dependants or the benefits which accrue, or to the pensions which are
payable, thereunder, or to the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined or to the
basis on which the liabilities (including pensions) of such pension schemes are
funded or made, or agreed or consented to any change to the trustees involving
the appointment of a trust corporation;
(m) implemented, effected or authorised, proposed or announced its intention
to implement any composition, assignment, reconstruction, amalgamation,
commitment, scheme or other transaction or arrangement (other than the Offer);
(n) made any alteration to its memorandum or articles of association; or
(o) entered into any contract, commitment, agreement or arrangement or passed
any resolution with respect to, or announced an intention to, or to propose to
effect, any of the transactions, matters or events referred to in this condition
(viii);
(ix) save as disclosed in the annual report and accounts of Arawak for the
year ended 31 December 2007, specifically referred to in the Prospectus or as
publicly announced to a Regulatory Information Service by or on behalf of Arawak
before 28 October 2008, since 31 December 2007:
(a) no material adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects of
Arawak or any other member of the Wider Arawak Group;
(b) no material litigation or arbitration proceedings, prosecution or other
legal proceedings having been instituted, announced, implemented or threatened
in writing by or against or remaining outstanding against or in respect of any
member of the Wider Arawak Group or to which any member of the Wider Arawak
Group is or may become a party (whether as plaintiff, defendant or otherwise)
the effect of which is materially adverse to any member of the Wider Arawak
Group;
(c) (other than as a result of the Offer) no enquiry or investigation by, or
complaint or reference to, any Third Party having been threatened in writing,
announced, implemented or instituted by or against or remaining outstanding
against or in respect of any member of the Wider Arawak Group which in any such
case is materially adverse to the interests of any member of the Wider Arawak
Group; and
(d) no material contingent or other liability of any member of the Wider
Arawak Group having arisen or become apparent or materially increased;
(x) no member of the Vitol Group having discovered that:
(a) any financial, business or other information concerning Arawak or the
Wider Arawak Group that has been disclosed at any time by or on behalf of any
member of the Wider Arawak Group is misleading, contains any material
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein not misleading and which was not subsequently
corrected before 28 October 2008 by disclosure either publicly or otherwise to
Rosco;
(b) any member of the Wider Arawak Group is subject to any material liability
(actual or contingent) that has not been disclosed in the annual report and
accounts of Arawak for the year ended 31 December 2007; or
(c) any information which affects the import of any information disclosed in
writing at any time by or on behalf of any member of the Wider Arawak Group;
(xi) no member of the Vitol Group having discovered that:
(a) any past or present member of the Wider Arawak Group has not complied
with all applicable legislation or regulations of any jurisdiction or
authorisations with regard to the storage, disposal, discharge, carriage,
spillage, leakage or emission of any waste or hazardous substance or any
substance likely to impair the environment or harm human health, or otherwise
relating to environmental matters or the health and safety of any person, or
that there has otherwise been any such use, treatment, handling, storage,
transport, release, disposal, discharge, spillage, leakage or emission (whether
or not this constituted a non-compliance by any person with any legislation or
regulations and wherever the same may have taken place) which, in any case,
would be likely to give rise to any liability (whether actual or contingent) or
cost on the part of any member of the Wider Arawak Group;
(b) there is, or is likely to be, any material liability (whether actual or
contingent) to make good, repair, reinstate or clean up any property now or
previously owned, occupied or made use of by or on behalf of any past or present
member of the Wider Arawak Group, or in which any such member may now or
previously have had or be deemed to have or have had an interest, or any other
property or any controlled waters under any environmental legislation,
regulation, notice, circular or order or other lawful requirement of any
relevant authority or Third Party or otherwise; or
(c) that circumstances exist whereby a person or class of persons would be
likely to have a claim in respect of any product or process of manufacture or
materials used therein now or previously manufactured, sold or carried out by
any past or present member of the Wider Arawak Group.
For the purposes of these conditions:
(a) "Third Party" means any government, government department or
governmental, quasi-governmental, supranational, statutory, regulatory or
investigative body, authority (including any national anti-trust or merger
control authority), court, trade agency, association, institution or
professional or environmental body or any other person or body whatsoever in any
relevant jurisdiction;
(b) a Third Party shall be regarded as having "intervened" if it has decided
to take, institute, implement, or threaten any action, proceeding, suit,
investigation or enquiry or reference, or made, enacted or proposed any statute,
regulation, decision, order or change to published practice, or taken any
measures or other steps or required any action to be taken or information to be
provided or otherwise having done anything and 'intervene' shall be construed
accordingly;
(c) "authorisations" means authorisations, orders, grants, recognitions,
confirmations, consents, licences, clearances, permissions, exemptions and
approvals; and
(d) "the Wider Arawak Group" means Arawak and its subsidiary undertakings,
associated undertakings and any other undertakings in which Arawak and such
undertakings (aggregating their interests) have a substantial interest and "the
Wider Vitol Group" means Vitol Holding B.V. and its subsidiary undertakings,
associated undertakings and any other undertaking in which Vitol Holding B.V.
and such undertakings (aggregating their interests) have a substantial interest.
Subject to the requirements of the Panel, Rosco reserves the right to waive all
or any of the above conditions, in whole or in part, except condition (i). The
Offer will lapse if it does not become or is not declared unconditional as to
acceptances. Further, the Offer will lapse unless conditions (ii) to (xi) have
been fulfilled or (if capable of waiver) waived, or, where appropriate, have
been determined by Rosco to be or remain satisfied, by midnight (London time) on
the day which is 21 days after the date on which the Offer becomes or is
declared unconditional as to acceptances, or such later date as Rosco may, with
the consent of the Panel, decide, provided that Rosco shall be under no
obligation to waive or treat as fulfilled any of conditions (ii) to (xi)
inclusive by a date earlier than the latest date specified above for the
fulfilment thereof notwithstanding that any such condition or the other
conditions of the Offer may at such earlier date have been fulfilled and that
there are at such earlier date no circumstances indicating that any of such
conditions may not be capable of fulfilment.
The Offer will lapse (unless otherwise agreed by the Panel) if the European
Commission either initiates proceedings under Article 6(1)(c) of Council
Regulation (EC) No 139/2004, as amended, or makes a referral to a competent
national authority under Article 9(1) thereof and, having done so, the UK
Competition Commission initiates an in-depth investigation in relation to the
acquisition of Arawak, before the later of 3.00 pm (London time) on the first
closing date of the Offer and the date on which the Offer becomes or is declared
unconditional as to acceptances.
If the Offer lapses it will cease to be capable of further acceptance and Rosco
and accepting Arawak Shareholders shall thereupon cease to be bound by Forms of
Acceptance submitted at or before the time when the Offer so lapses.
If Rosco is required by the Panel to make an offer for Arawak Shares under the
provisions of Rule 9 of the Code, Rosco may make such alterations to the terms
and conditions of the Offer as are necessary to comply with the provisions of
that Rule.
3. Certain further terms of the Offer
The Arawak Shares which are subject to the Offer will be acquired by Rosco fully
paid, with full title guarantee and free from all liens, charges, equitable
interests, encumbrances, rights of pre-emption and other third party rights or
interests of any nature whatsoever and together with all rights now or hereafter
attached thereto including, without limitation, the right to receive and retain
any dividend and other distribution, announced, declared, made or paid on or
after the date of this Announcement.
The availability of the Offer to persons not resident in the United Kingdom or
Canada may be affected by the laws of the relevant jurisdictions. Persons who
are not resident in the United Kingdom or Canada should inform themselves about
and observe any applicable requirements.
APPENDIX II
SOURCES AND BASES
In this Announcement:
(i) Unless otherwise stated, financial information concerning Arawak has been
extracted from its announcement of results for the quarter ended 30 September
2008, announced on 14 November 2008.
(ii) The value of the issued share capital of Arawak is based upon
182,644,452 Arawak Shares and excludes Arawak Shares which could fall to be
issued on exercise in full of options granted under the Arawak Share Option
Schemes.
(iii) The closing market price of an Arawak Share is the closing middle
market price extracted from the Daily Official List or closing price extracted
from the Toronto Stock Exchange, as applicable, for the relevant day.
(iv) For the purposes of converting Canadian dollars (CAD) to pounds sterling
(GBP) a currency exchange rate of CAD 1.8288 to GBP1.00 has been applied, being
the Bloomberg Rate as at 5.00 pm (London time) on 15 January 2009.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this Announcement, unless the context
otherwise requires:
+---------------------------+-----------------------------------------------+------+
| Announcement | this announcement, including the summary and all |
| | appendices |
+---------------------------+------------------------------------------------------+
| Arawak or the Company | Arawak Energy Limited |
| | |
+---------------------------+------------------------------------------------------+
| Arawak Directors | the directors of Arawak |
+---------------------------+------------------------------------------------------+
| Arawak Group | Arawak and its subsidiary undertakings and, where |
| | the context permits, each of them |
| | |
+---------------------------+------------------------------------------------------+
| Arawak Share Option | the Arawak Energy Long-Term Incentive Plan, the |
| Schemes | Arawak Energy Share Option Plan and the Arawak |
| | Energy Corporation Stock Option Plan and any other |
| | arrangement for involving the employees of Arawak |
| | and members of its group in the share capital of |
| | Arawak |
+---------------------------+------------------------------------------------------+
| Arawak Shareholders | holders of Arawak Shares |
| | |
+---------------------------+------------------------------------------------------+
| Arawak Shares | the existing unconditionally allotted or issued |
| | common shares in the capital of Arawak (other than |
| | any such shares that may be Treasury Shares while |
| | held by Arawak) and any further such shares which |
| | are unconditionally allotted or issued (including |
| | pursuant to the exercise of outstanding options |
| | granted under the Arawak Share Option Schemes) at or |
| | prior to the time at which the Offer closes for |
| | acceptance (or, subject to the provisions of the |
| | Code, such earlier time and/or date, not being |
| | earlier than the date on which the Offer becomes |
| | unconditional as to acceptances or, if later, the |
| | first closing date of the Offer, as Rosco may |
| | decide) |
| | |
+---------------------------+------------------------------------------------------+
| Australia | the Commonwealth of Australia and its dependent |
| | territories |
| | |
+---------------------------+------------------------------------------------------+
| Bloomberg | Bloomberg L.P., a financial software services, news |
| | and data company |
+---------------------------+------------------------------------------------------+
| Bloomberg Rate | the average of the "best ask" and "best bid" GBP-CAD |
| | cross rate, sourced from Bloomberg |
+---------------------------+------------------------------------------------------+
| business day | a day, not being a Saturday or a Sunday, on which |
| | banks in London and Toronto are typically open for |
| | business |
| | |
+---------------------------+------------------------------------------------------+
| CAD | Canadian dollars |
+---------------------------+------------------------------------------------------+
| Canada | Canada, its provinces and territories |
+---------------------------+------------------------------------------------------+
| Code | the City Code on Takeovers and Mergers |
+---------------------------+------------------------------------------------------+
| Companies Law | the Companies (Jersey) Law 1991, as amended |
| | |
+---------------------------+------------------------------------------------------+
| Conditions | the conditions to the Offer set out in paragraph 2 |
| | of Appendix I |
+---------------------------+------------------------------------------------------+
| Credit Suisse | Credit Suisse Securities (Europe) Limited |
+---------------------------+------------------------------------------------------+
| Daily Official List | the Daily Official List of the London Stock Exchange |
| | |
+---------------------------+------------------------------------------------------+
| Directors' Irrevocable | the irrevocable undertakings entered into by each of |
| Undertakings | the Arawak Directors in connection with the Offer |
+---------------------------+------------------------------------------------------+
| Form of Acceptance | the form of acceptance and authority for use by |
| | Arawak Shareholders in connection with the Offer |
| | |
+---------------------------+------------------------------------------------------+
| FSU | Former Soviet Union |
+---------------------------+------------------------------------------------------+
| Japan | Japan, its cities, prefectures, territories and |
| | possessions |
| | |
+---------------------------+------------------------------------------------------+
| Kazakhstan or Republic of | the Republic of Kazakhstan, its provinces and |
| Kazakhstan | territories |
+---------------------------+------------------------------------------------------+
| London Stock Exchange | London Stock Exchange Group plc |
| | |
+---------------------------+------------------------------------------------------+
| Macquarie | Macquarie Capital Markets Canada Ltd |
+---------------------------+------------------------------------------------------+
| Offer or Increased | the cash offer at CAD 1.00 per Arawak Share to be |
| Recommended Offer | made by Rosco for all of the Arawak Shares on the |
| | terms and subject to the conditions to be set out in |
| | the Offer Document and in the Form of Acceptance |
| | including, where the context requires, any |
| | subsequent revision, variation, extension or renewal |
| | of such offer and includes any election available |
| | thereunder |
+---------------------------+------------------------------------------------------+
| Offer Document | the document to be posted on behalf of Rosco |
| | containing the terms and conditions of the Offer |
+---------------------------+------------------------------------------------------+
| Offer Period | the period which commenced on 28 October 2008, the |
| | date of this an Announcement, and ending on the |
| | first closing date of the Offer or, if later, the |
| | date the Offer becomes or is declared unconditional |
| | as to acceptances or lapses |
+---------------------------+------------------------------------------------------+
| Official List | the Official List of the London Stock Exchange |
+---------------------------+------------------------------------------------------+
| Original Announcement | the announcement made by Rosco on 28 October 2008 of |
| | a cash offer for all of the Arawak Shares at CAD |
| | 0.90 per Arawak Share |
+---------------------------+------------------------------------------------------+
| Original Offer Price | the proposed offer at CAD 0.90 per Arawak Share |
| | announced by Rosco on 28 October 2008 |
+---------------------------+------------------------------------------------------+
| Panel | The Panel on Takeovers and Mergers |
| | |
+---------------------------+------------------------------------------------------+
| Pre-Condition | the pre-condition to the Offer set out in paragraph |
| | 1 of Appendix I |
+---------------------------+------------------------------------------------------+
| Prospectus | the prospectus relating to Arawak dated 26 June 2008 |
+---------------------------+------------------------------------------------------+
| RBC Capital Markets | the trading name of Royal Bank of Canada Europe |
| | Limited and RBC Dominion Securities Inc, |
| | subsidiaries of Royal Bank of Canada |
+---------------------------+------------------------------------------------------+
| Regulatory Information | shall have the meaning given in Appendix 1.1 to the |
| Service | Listing Rules of the UK Listing Authority |
| | |
+---------------------------+------------------------------------------------------+
| Relationship Agreement | the relationship agreement dated 26 June 2008 |
| | between Arawak, Rosco and Vitol B.V. |
+---------------------------+------------------------------------------------------+
| Rosco | Rosco S.A., or a wholly owned subsidiary of |
| | Rosco S.A. designated by Rosco S.A. to make |
| | the Offer |
+---------------------------+-----------------------------------------------+
| subsidiary, subsidiary | shall have the meanings given by the |
| undertaking, associated | Companies Act 2006 |
| undertaking and | |
| undertaking | |
| | |
+---------------------------+-----------------------------------------------+
| Subsoil Law of Kazakhstan | the law of Kazakhstan on subsoil and subsoil |
| | use first adopted on 27 January 1996 (as |
| | amended) |
+---------------------------+-----------------------------------------------+
| substantial interest | shall mean a direct or indirect interest in |
| | 20 per cent or more of the equity capital of |
| | an undertaking |
+---------------------------+-----------------------------------------------+
| Support Agreement | the agreement entered into between Rosco and Arawak |
| | on the date of this announcement in connection with |
| | the Increased Recommended Offer |
+---------------------------+------------------------------------------------------+
| Treasury Shares | any Arawak Shares which are for the time being held |
| | by Arawak as treasury shares under Article 58(A)(i) |
| | of the Companies Law |
+---------------------------+------------------------------------------------------+
| UK Listing Authority | the Financial Services Authority acting in |
| | its capacity as the competent authority for |
| | listing under Part VI of the Financial |
| | Services and Markets Act 2000 |
| | |
+---------------------------+-----------------------------------------------+
| UK or United Kingdom | the United Kingdom of Great Britain and |
| | Northern Ireland |
| | |
+---------------------------+-----------------------------------------------+
| US or United States | the United States of America, its possessions |
| | and territories, all areas subject to its |
| | jurisdiction or any subdivision thereof, any |
| | State of the United States and the District |
| | of Columbia |
| | |
+---------------------------+-----------------------------------------------+
| US$ | the lawful currency of the US |
+---------------------------+-----------------------------------------------+
| Vitol Group | Vitol Holding B.V. and its subsidiary undertakings |
| | and, where the context permits, each of them |
| | |
+---------------------------+------------------------------------------------------+
| GBP | pounds sterling, the lawful currency of England |
+---------------------------+-----------------------------------------------+------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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