Sona gives up,shareholders to get money after liquidation

The management, led by Datuk Seri Hadian Hashim (caricature), said that Sona was set to tutup kedai (close shop) and was in the midst of appointing a liquidator.(Sona had earlier sought to buy a 100% interest (plus operatorship) in the Stag Oilfield, an offshore Western Australia oilfield which was already producing oil at the rate of 4,600 barrels per day as of June 2015, for US$25mil (RM104mil). Inset filepic)

SHAH ALAM: Amid falling investor confidence on special-purpose acquisition companies (SPACs), Sona Petroleum Bhd has given them a reason to be optimistic after the management gave its commitment to return money to shareholders, following its failure to get a qualifying asset (QA).

The management, led by Datuk Seri Hadian Hashim (caricature), said that Sona was set to tutup kedai (close shop) and was in the midst of appointing a liquidator.

“Sona will undertake the process of liquidation, as the company is solvent. We are in the process of identifying liquidators,” he said after its AGM here yesterday.

“We have some RM500mil cash in hand and that would translate to 48 sen per share. But again, it depends on the liquidators and other due diligence that we have to do,” he added.

Sona closed at 45 sen each and the yield on an annual basis is about 6.5%.

According to its annual report, monies in the custodian trust account amounted to RM527.76mil as of Dec 31, 2015. Deposits with licensed Islamic banks also included an amount of RM386,401, which is pledged as securities for a bank guarantee facility granted to the company of RM356,864 and is restricted in use. The deposit is earning interest of up to 4.15% per annum.

Hadian was uncertain when the shareholders would get their money back, as it would depend on the processes including getting clearance from the relevant authorities.

“Our intention is to return the money to shareholders as soon as we personally can, but it is driven by the liquidation process and the liquidator. It would be unfair for me to say this month or that month. We have no interest in holding back the money and neither does the liquidator,” Hadian said.

Sona is the second SPAC to undergo a liquidation process. Another SPAC, CLIQ Energy Bhd, had failed to get its QA in April this year.

However, the shareholders had no idea as to when the RM360mil would be returned.

This came about as the management of CLIQ, through its private company Best Oracle Sdn Bhd, had filed a judicial review on the Securities Commission’s decision to reject its submission for the QA.

The management, through Best Oracle, had also filed a suit to strike out the liquidation petition of CLIQ that had been initiated by the independent members of the board.

The judicial review is due to be heard on Sept 14, while Best Oracle’s suit to strike out the liquidation petition is due on June 24.

In the case of Sona, it appeared to be a smooth process.

Hadian said the liquidation process would take place after July as provided for in the SPAC guidelines. He also expressed disappointment that the company had to be liquidated. It has until July 31 to complete its QA and it would be difficult to get shareholders’ approval if it embarks on the acquisition of another asset.

If a SPAC has not secured a QA after three years, it is to return the money raised in conjunction with the listing to shareholders.

SPACs have attracted a huge number of yield-seekers who are keen to capitalise on the returns that are guaranteed due to the presence of the cash-back option in such companies.

On June 2, the sellers of Stag Oilfield – Santos Offshore Pty Ltd and Quadrant Northwest Pty Ltd – terminated the sale and purchase agreement (SPA) with immediate effect.

Sona had earlier sought to buy a 100% interest (plus operatorship) in the Stag Oilfield, an offshore Western Australia oilfield which was already producing oil at the rate of 4,600 barrels per day as of June 2015, for US$25mil (RM104mil).

One of the conditions precedent to complete the SPA was getting the approval of Sona’s shareholders for the proposed acquisition. Sona had first proposed to acquire a 100% stake in Stag Oilfield assets from Quadrant Northwest and Santos Offshore for US$50mil last November.

The price, however, was reduced by half to US$25mil following an independent valuation. But some shareholders had reservations about the deal at an EGM in March, forcing the company to adjourn the meeting to a later date. Sona held its second EGM in April to obtain shareholders’ approval to acquire the Stag Oilfield from Quadrant Northwest and Santos Offshore.

However, 77.39% of its shareholders voted against its proposed QA of Stag Oilfield for US$25mil. It was reported that the vote-counting process took more than two hours.