Sound Energy's Strategic Exit from Tendrara Gas Project
In a significant move, Sound Energy PLC (AIM:SOU) announced on Monday the completion of a binding agreement to sell its 20% stake in the Tendrara gas concession in Morocco to Managem SA for a total of $57 million. This transaction involves the divestment of all shares of Sound Energy Meridja Limited, with the proceeds comprised of a nominal $1 for the shares and the repayment of shareholder loans previously extended to the subsidiary. Additionally, Sound Energy will relinquish its 27.5% interest in the Anoual exploration license and forfeit rights to the Grand-Tendrara exploration license. This strategic sale is intended to fund the repayment of its senior secured notes amounting to €28.8 million, due in December 2027.
The sale signifies Sound Energy's exit from the onshore gas development project at Tendrara. Upon completion of the transaction, Managem and its associated entities will hold a 75% operational interest in the concession, while ONHYM retains a 25% stake. Given the scale of the transaction relative to Sound Energy's size, shareholder approval is required under AIM Rule 15. A circular convening a general meeting will be dispatched to shareholders in the coming days. Furthermore, the agreement is subject to approvals from the Moroccan Ministry of Energy and the foreign exchange authority.
Conditions and Future Outlook
The conditions precedent must be satisfied within three months of signing the agreement, with a possible one-month extension. If these conditions are not met, the agreement will become null and void. Sound Energy anticipates that after settling all debts, it will have a cash balance of $11 million, assuming the closing occurs by July 31, 2026. Following the completion of the transaction, the company will be classified as a 'cash shell' under AIM Rule 15 and must undertake a reverse takeover within six months to avoid suspension from trading.
The company has received irrevocable commitments from holders of 30% of the notes regarding the proposed amendments to the repayment terms. A Consent Solicitation Memorandum will be released shortly. The loss attributed to the assets being sold was approximately £1.0 million for the fiscal year ending December 31, 2025.
As reported by de.investing.com.
