Rendering of the Sangomar FPSO - FAR

FAR finally gets takeover offer from Remus Horizons

Following a conditional non-binding indicative proposal in late 2020, Australia’s FAR Limited has finally received a takeover offer from a private investment fund, Remus Horizons.

Rendering of the Sangomar FPSO; Sourtesy of SOFEC

To remind, FAR Limited in December 2020 received the conditional non-binding indicative proposal from Remus Horizons to engage in further discussions and further investigations for the purpose of evaluating its capacity to make an offer or announce an intention to make an offer to acquire 100 per cent of the shares of FAR at 2.1c cash per share.

In an update on Wednesday, FAR said that it has now received the accompanying letter from Remus Horizons advising its intention to make a takeover offer for FAR shares at 2.1 cents per share.

According to the company, the proposed takeover is conditional only on shareholders rejecting the sale of FAR’s interest in the RSSD Project and the FAR directors confirming that there is no intention to dispose of this interest prior to the closing of the takeover offer.

Namely, FAR intended to sell its interest in the RSSD project, which contains the Sangomar field off Senegal, to Woodside, which pre-empted the stake sale to India’s ONGC in early December 2020.

After receiving Remus’ non-binding offer in December, the Australian company postponed its shareholders meeting from December to 21 January 2021 to obtain further information in relation to the proposal and assess the relative merits of the sale alternative and the proposal.

In early January 2021, FAR rescheduled the shareholders meeting to 18 February to consider the Remus proposal.

Later in January, the company executed a sale and purchase agreement with Woodside related to the sale of its interest in the Senegal RSSD Project. The plan was for the shareholders to consider authorising the agreement with Woodside at a shareholders’ meeting on 18 February.

Only a day before the meeting was supposed to take place, FAR revealed that Russia’s Lukoil made a conditional non-binding indicative proposal to acquire FAR at A2.2c cash per share.

Lukoil’s offer was also conditional on FAR not selling the Sangomar stake. As a result, the shareholders meeting was postponed again.

However, with both Remus and Lukoil proposals remaining incomplete by mid-March, FAR decided to put its foot down and determined to reconvene the shareholders meeting on 15 April 2021.

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Come April and Lukoil said it was not proceeding to a legally binding offer for the Australian company.

In the Wednesday update, the company noted that the shareholders are due to consider approving the sale to Woodside at the shareholders’ meeting convened for Thursday, 15 April.

The FAR board recognised that shareholders are likely to want an opportunity to consider the implications of this prior to voting on the sale resolution.

Accordingly, the board intends to address this development as the first item of business at the meeting, including whether shareholders would seek more time to consider its implications.

When it comes to the development of the Sangomar project, Chinese shipyard Cosco Shipping Heavy has already started working on a conversion of a very large crude carrier (VLCC) into floating production storage and offloading (FPSO) vessel for the Woodside-operated project.

The vessel had been named FPSO Léopold Sédar Senghor and the conversion will take around two years. First oil production from the FPSO is targeted for 2023.