KUALA LUMPUR (Jan 6): Handal Energy Bhd (KL:HANDAL) announced on Monday that its joint venture (JV) agreement with Kazakhstan-based Hadid Oil and Gas LLP for joint involvement in an early oil production field development programme has been called off.
In a bourse filing, Handal Energy said the deal was terminated as one of the conditions stated in the JV agreement was not fulfilled. It did not specify what that condition was.
It first announced the proposed JV in mid-January 2024, to set up a special purpose vehicle for the venture into Phase 1 of the Nipineftegas field development plan.
At the time, it had said that the agreement was subject to numerous conditions, including the execution of a redeemable non-convertible preference shares (RNCPS) agreement between its subsidiary and Pelaburan Mara Bhd, with the latter subscribing to the RNCPS issued by the subsidiary at an issue price to be determined, based on an issue size of US$5 million (RM23.64 million).
Following the announcement of the proposed JV, Pelaburan Mara said it had not received any proposal from Handal Energy concerning an investment in RNCPS, emphasising that no evaluation or confirmation regarding the issue was conducted.
Subsequently, Handal Energy clarified that it had unintentionally named Pelaburan Mara as the party that would potentially invest in the subsidiary, saying its previous announcement should have read "investors interested in the joint venture" instead.
It also said it was in talks with “various potential investment parties” who were interested in using Pelaburan Mara’s investment platform for their investments, adding no definitive agreement had been reached at the time.
"The termination of the JV agreement is not expected to have any material effect on the earnings, net assets and gearing of Handal Group for the financial year ending June 30, 2025 and will have no effect on the share capital and substantial shareholders’ shareholding of the company," Handal Energy's Monday filing read.
Handal Energy's shares closed unchanged at 5.5 sen on Monday, valuing it at RM20.7 million.