LONDON (Alliance News) - Gulfsands Petroleum PLC on Friday said Dubai-based Arawak Energy International Ltd has terminated the agreement between the two companies to develop new business opportunities in the Middle East and North Africa region.
Gulfsands said Arawak advised that it the decision to terminate the agreement resulted from talks held with the company in recent days and public statements made by shareholders and non-executive directors of Gulfsands in recent weeks.
In addition, Arawak has confirmed that, in view of these events, it reserves all of its rights under the loan facility it has provided to Gulfsands, including the right to terminate its loan facility and to require repayment of all money advanced to the company under the deal. At present, Arawak has advanced a total of USD10 million to Gulfsands under the deal.
Should Arawak decide to terminate the facility and demand repayment, Gulfsands said it would be obligated to repay the full USD10 million, along with USD1 million in additional fees and expenses.
Arawak also told the company that in the event of the removal of Chief Executive Mahid Sajjad and Commercial Director Ken Judge, which has been demanded by shareholder Waterford Finance and Investment Ltd and on which the company's shareholders will vote at a meeting in February, it will not hesitate to enforce its rights under the loan facility.
Owing to the development, Gulfsands said it has been forced to examine its options to ensure the availability of funding to repay the money under the Arawak facility should repayment be required and to ensure it has funding to continue trading.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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