(Alliance News) - Argos Resources Ltd said on Wednesday it intends to sell interests in the North Falkland Basin to JHI Associates Inc and to cancel trading of its shares, as it prepares for a voluntary liquidation.
Argos Resources is a Falkland Islands-based oil and gas exploration company focused on the North Falkland Basin. JHI Associates is an Ontario, Canada-incorporated exploration company focused on the Guyana-Suriname Basin.
Argos Resources said it has agreed to sell the PL001 offshore production license interests in the North Falkland Basin, held by subsidiary Argos Exploration Ltd, to JHI, subject to shareholder approval. The PL001 license is Argos Resources' principal asset.
Argos Resources will receive about 8.5 million JHI and GBP303,500 in cash. Of this, JHI already has made a non-refundable payment of GBP151,750. The JHI shares will represent a stake of about 6% to 7% in JHI, which has gross assets of about USD24.4 million.
As Argos's sole asset once the acquisition is complete will be the JHI shares, it plans to cancel its own shares from trading on the AIM market in London from June 6.
If shareholders approve the disposal and cancellation at a general meeting it called for May 26, Argos intends to wind up through members' voluntary liquidation. It has agreed with some of its creditors to settle liabilities with up to approximately 475,000 JHI common shares. Around 8 million JHI common shares are then expected to be distributed to Argos shareholders.
Shares in Argos Resources were down 36% in London on Wednesday at 0.49 pence each, giving the company a market capitalisation of GBP1.2 million.
By Emma Curzon, Alliance News reporter
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