"Soca Petroleum Limited, a wholly owned subsidiary of Range Resources Limited registered in Barbados has entered into a conditional agreement to acquire RRDSL, subject to the parties entering into final agreements in respect of the transaction;"
RRL purchasing RRDSL then selling to to subsidiary Soca Petroleum...what are the benefits here ..
1. RRL control the price of RRL drills 2. RRL profit if RRDSL success. 3. In the event that RRDSL don't make it and fall on hard times, Soca Petroleum appear to be the party who is liable via the reverse t/o, not RRL.
win, win ?
Happy to hear back if there is something I have missed..
My understanding is that when a listed company acquires a non listed company (RRDSL has not floated) the reverse takeover is simply a mechanism to incorporate that smaller business into the larger listed business without the expense of a floatation. What is a 'Reverse Takeover - RTO'
"A reverse takeover (RTO) is a type of merger that private companies use to become publicly traded without resorting to an initial public offering (IPO). Initially, the private company buys enough shares to control a publicly traded company. The private company's shareholder then uses its shares in the private company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded company. An RTO is also known as a reverse merger or a reverse IPO."
Reverse takeovers 14. A reverse takeover is any acquisition or acquisitions in a twelve month period which for an AIM company would: ♦ exceed 100% in any of the class tests; or ♦ result in a fundamental change in its business, board or voting control; or ♦ in the case of an investing company, depart materially from its investing policy (as stated in its admission document or approved by shareholdersin accordance with these rules). Any agreement which would effect a reverse takeover must be: ♦ conditional on the consent of its shareholders being given in general meeting; ♦ notified without delay disclosing the information specified by Schedule Four and insofar as it is with a related party, the additional information required by rule 13; and ♦ accompanied by the publication of an admission document in respect of the proposed enlarged entity and convening the general meeting. Where shareholder approval is given for the reverse takeover, trading in the AIM securities of the AIM company will be cancelled. If the enlarged entity seeks admission, it must make an application in the same manner as any other applicant applying for admission of its securities for the first time.
That's a valid point Celtic and I had wondered that myself, why it hadn't been renamed to something befitting the LO ownership. If your buyback option theory is correct one might have thought it could have been disclosed either at the time of the original sale, or yesterday. A Q for the Q&A.
Just an observation but the company always kept the Range name (Range Resources Drilling Services Limited), could it be that this was always the agreement with LO. They come on board sort out the drilling services and we buy it back.
Phil I think some may have over reacted to yesterday's as you describe clumsy half storey. There are any number of variations of the theme with some positives among the dross. It mainly comes down to once again a very amateur approach to communications from the BOD. One very positive side that I haven't seen mentioned is that there will be an independent assessment and providing the assessor is totally independent from the fairly recent report on ASX it should give some indication of just where the company stands. Then again the big disappointment is the already flagged up waterflood 2500 bopd and it can't be very good if they are flagging it up at this stage. Also what effect the Petrotrin chaos is having is anybody's guess and once again we are left to guess!
So why are LandOcean getting rid? If it's for valid strategic reasons that is a win/win for both parties then it should be straightforward enough to say so. Hopefully all will be revealed in the AIM admission documents to come, but yesterday's clumsy half a story seems to have alienated plenty of loyal Range shareholders judging by comments here and on WS, and it's always a more difficult job to win back the support of those you have peed off.
It was interesting to see from the photos of the rigs that they seem to be very mobile and one of them actually on a wheeled base. This will be why LGO could move one of the rigs onto site, have it drilling within two days and completing the entire drill in a week. A service company working for LGO hires a Range rig with spectacular results must bode well for the future.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.