Philex Petroleum Corp said on Monday it might buy the stocks of minority shareholders in London-listed Forum Energy Plc., its partner for Service Contract 72 at the disputed Reed Bank in the West Philippine Sea.
Philex told the Philippine Stock Exchange that Forum Energy might cancel its listing on the London Stock Exchange’s Alternative Investment Market.
“Philex is currently considering whether such an offer will be made and there is no certainty that such an offer will be made,” the company said.
The AlM is LSE’s international market for smaller, growing companies that include early stage, venture capital backed and more established companies seeking access to growth capital.
Philex owns approximately 60.57 percent of Forum Energy (including through Philex’s subsidiary, FEC Resources Inc, (FEC) and FEC’s nominee, Ferlim Nominees Limited). Forum energy holds 70 percent interest in the Recto Bank oil exploration project covered by Service Contract No. 72.
If Philex would decide to buy the stocks of minority shareholders in Forum Energy, the price would be 20 percent per share.
Forum Energy has considered applying for cancellation of admission to AIM of the company’s ordinary shares following its announcement on March 2 in relation to the decision by the Department of Energy (DOE) to suspend Service Contract 72 due to force majeure.
The DOE in March suspended all drilling and exploration works in the West Philippine Sea, particularly in the area covered by Service Contract (SC) 72 in the Reed Bank due to territorial dispute between the Philippines and China.
The cancellation would require shareholders resolution at the company’s forthcoming annual general meeting in June.
Forum Energy said it is currently in discussions with Philex Petroleum to acquire their shares for cash before the cancellation takes effect.
Forum Energy said it would give its minority shareholders the opportunity to sell their shares before its application to list on the AIM is actually cancelled, rather than retaining shares in an unlisted company.
“As the company is unable to make a tender offer for its shares due to having negative reserves, it has explored other alternatives,” Forum energy said.