(Alliance News) - Hardy Oil & Gas PLC on Monday said it agreed to to sell Hardy Exploration & Production India Inc to Hindustan Oil Exploration Co Ltd for USD1.5 million in cash.
The exploration and production company said HEPI is its wholly-owned subsidiary and is incorporated in the US State of Delaware. It holds interests in three oil & gas block assets located in India.
Hardy said it has faced "significant" challenges in respect of these assets, including protracted litigation with the government of India and disputes with partners. These challenges have been ongoing for an "extended" period of time and have resulted in Hardy being unable to operate or commercialise these assets, it said.
"The board unanimously considers that the transaction is in the best interests of all shareholders. It reduces significantly the outgoings associated with HEPI remaining part of the group, it draws a line under the protracted - and we believe unfair - treatment of the group by the Indian judiciary and it removes a major element of uncertainty for investors," said Chair Alasdair Locke.
If approved by shareholders, the transaction will result in Hardy becoming a cash shell. Following completion, Hardy said it will transfer its listing from the premium segment to the standard segment and the net proceeds from the sale will be retained to provide additional working capital for the company and will be added to its cash resources to seek new investment opportunities.
Hardy shares closed 3.0% lower on Monday in London at 3.25 pence each.