Agriterra Ld Regulatory News (AGTA)

19 May 2005 07:00

White Nile Limited19 May 2005 White Nile Limited / Epic: WNL / Market: AIM / Sector: Oil & Gas White Nile Limited ("White Nile" or "the Company") 'Clearance by Takeover Panel' In 2004, the prospective Government of Southern Sudan ("GOSS") granted itsnational oil company, Nile Petroleum Corporation Limited ("NPC"), a concessionto explore and develop hydrocarbon interests in Block Ba, which contains part ofthe Muglad basin in Southern Sudan ("the Concession"). It has previously beenannounced that White Nile is to acquire an interest in the Concession ("theAcquisition"). Full details of the Acquisition are included in the circular tothe shareholders of White Nile which will be despatched on 19 May 2005. TheAcquisition is subject to the approval of shareholders at an ExtraordinaryGeneral Meeting to be held on 16 June 2005. Under the terms of the Acquisition, the Company is entitled to 60% of the grossrevenues generated from the Concession in return for bearing 100% of the costsof exploration, development and production, subject to being entitled to aminimum annual internal rate of return on capital of 40%. In consideration for the Acquisition, GOSS via NPC will receive 155,000,000ordinary shares of 0.1p each in the Company ("the NPC Shares") which willrepresent 50% of the enlarged share capital of White Nile. NPC will also havethe right to appoint two members to the board of White Nile and as the holder of50% of White Nile's share capital could potentially dictate the futurecomposition of the Board and the direction of the Company. NPC will also havean option to transfer its remaining interest in the Concession to White Nile inreturn for the issue of a further 206,666,667 ordinary shares in the Company ("the NPC Option Shares") such that, depending on the timing of further equityfundraising by White Nile, NPC's holding could rise to 70%. If NPC exercisesthis option it will have the right to appoint a further director to the board. NPC was incorporated in Yei, Southern Sudan, on 22 July 2004 with company number196. It is wholly owned by the GOSS. The directors of NPC are Bullen Bol, KuolManyang Juuk and Simon Kun Puoch. Sudan is essentially governed by twogovernments: Northern Sudan is governed by the National Islamic Front andSouthern Sudan, where the Concession is located, is governed by the SudanPeople's Liberation Movement who formed the GOSS. Doctor Riek Machar is thePrime Minister of the GOSS and he chairs the leadership council comprisingaround 7 members who represent different tribal groups. NPC director KuolManyang Juuk is a member of the leadership council. The managing director ofNPC, Bullen Bol, reports to the Minister of Energy, who in turn reports to theleadership council. It is not yet known which representatives of NPC or theGOSS will be appointed to the board of White Nile Limited, though suchappointments are subject to their meeting the requirements of the London StockExchange. The appointments will be determined by the directors of NPC at thedirection of the leadership council. The directors have received irrevocable undertakings from shareholdersrepresenting more than 99% of the issued share capital of the company to vote infavour of the resolution approving the Acquisition. Once the Acquisition iscompleted White Nile will become a company controlled, at shareholder level, bythe GOSS who will hold 50% of the voting shares. As far as the board ofdirectors is concerned, Phil Edmonds, Andrew Groves and Brian Moritz willcontinue to be directors and in due course NPC may appoint two directors. Asnoted above, at present the names of the directors that the GOSS may choose toappoint to White Nile and the extent to which it will seek to exert executiveinfluence over White Nile is not known. The UK City Code on Takeovers and Mergers ("the City Code") applies to publiccompanies which are resident in the United Kingdom, the Channel Islands or theIsle of Man and therefore applies to the Company. Under Rule 9 of the City Codea party acquiring a holding of 30% or more of a company's voting rights isnormally obliged to make a general offer to all other shareholders to acquirethe shares not held by them. Rule 9 of the City Code also states that if any person or group of personsacting in concert holds not less than 30%, but not more than 50% of the votingrights of such a company a general offer will normally be required if anyfurther shares are acquired. An offer under Rule 9 must be in cash and at the highest price paid within thepreceding twelve months for any shares in the company by the person required tomake the offer or any person acting in concert with him. Following completion of the Acquisition, NPC, which previously held no OrdinaryShares, will hold 50% of the enlarged issued share capital of the Company. Inthe event that NPC exercises the Option, it is possible that its holding in theCompany will be increased to 70%. The requirement for a general offer will normally be waived if the independentshareholders pass a resolution ("a whitewash resolution") approving such awaiver. The Takeover Panel also has the power to waive the requirement for ageneral offer to be made where independent shareholders representing more than50% of the shares of the company which would be eligible to vote on a whitewashresolution irrevocably undertake to vote in favour of a whitewash resolution,were one to be put to shareholders. The directors have received irrevocableundertakings of this nature from independent shareholders representing more than50% of the shares of the Company and accordingly the Takeover Panel has waivedthe requirement for a general offer to be made by NPC either following the issueby the Company of the NPC Shares or following the issue by the Company of theNPC Option Shares. Following the appointment of NPC's two representatives to the Board ofDirectors, the operations of the Company will be carried on from Southern Sudan,the Company's principal place of business will be in Southern Sudan and themajority of Directors will be resident outside the United Kingdom, ChannelIslands and the Isle of Man. Accordingly, the City Code will not apply to theCompany after such appointments on the basis that it will then no longer bemanaged in the United Kingdom, the Channel Islands or the Isle of Man. In thesecircumstances, NPC will be able to acquire further shares without triggering anobligation to make a mandatory offer under Rule 9 of the City Code, irrespectiveof the size of NPC's holding. Upon the appointment by NPC of its tworepresentatives to the Board of Directors an announcement will be made to thiseffect. * * ENDS * * Enquiries concerning this announcement should be directed to: Phil EdmondsWhite Nile Limited, 18 Upper Brook Street , London, W1K 7PUTel: 0845 108 6060 Hugo de SalisSt Brides Media & Finance Ltd, 46 Bedford Row, London, WC1R 4LRTel: 020 7242 4477 Paul Gray or Jeff WardNumerica Capital Markets Limited, 66 Wigmore Street, London, W1U 2HQTel: 020 7467 4000 This information is provided by RNS The company news service from the London Stock Exchange