NOT FOR RELEASE, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES OF
AMERICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE
UNLAWFUL.
Correction : Execution of a loan and
related call-option agreement
The announcement released earlier today contained some incorrect
references to the name of Proger. These are corrected below. There
have been no material changes to this announcement.
Press
Release
26
February, 2019
This announcement is deemed to contain Inside Information
as defined under the Market Abuse Regulations n. 596/2014
Cadogan Petroleum
Plc
(“Cadogan” or the
“Company”)
Execution of a
loan and related call-option agreement
Cadogan Petroleum plc (“Cadogan”), an independent, diversified
oil & gas company listed on the Main Market of the London Stock
Exchange, is pleased to announce that its wholly owned subsidiary
Cadogan Petroleum Holdings BV (“CPHBV”) has entered into a
Euro 13,385,000 loan agreement with
Proger Managers & Partners Srl (“PMP”), a privately owned
Italian company whose only interest is a 59.6% participation in
Proger Ingegneria Srl (“Proger Ingegneria”), a privately owned
company which has a 67.9% participating interest in Proger spa
(“Proger”). The loan carries an entitlement to interest at a rate
of 5.5% per year, payable at maturity (which is 24 months after the
execution date and assuming that the call option described below is
not exercised). The principal of the loan is secured by a pledge on
PMP’s current participating interest in Proger Ingegneria Srl, up
to a maximum guaranteed amount of Euro
13,385,000.
Proger is a privately-owned international contractor, providing
some of the world’s largest companies with comprehensive
engineering, project management and security solutions. Its second
largest shareholder, with a 27.4% participating interest, is
SIMEST, the Italian government agency which supports local
companies to achieve export driven growth. Proger is based in
Italy, with offices in the
Middle East, Africa and Europe, and is involved in major projects
around the world, including significant oil & gas, energy and
infrastructure installations, and has more than 60 years’
experience.
In the year to 31 December 2017,
Proger had revenues[1] of €110 million, generated an EBITDA
of €9.1 million and €4.0 million of net profit; for the first six
months of 2018, net profit grew to €2.74 million.
PMP will use the proceeds of the loan exclusively for the
purpose of subscribing to Proger Ingegneria’s capital increase,
whilst Proger Ingegneria will in turn use the cash contribution
received exclusively to subscribe its 67.9% portion of
Proger’s capital increase. Proger will use the capital to finance
its business plan which targets a material increase of EBITDA over
the next 5 years, driven by the expansion of energy projects in the
Middle East as well as by the
development of its integrated services business.
Proger’s business plan and its growth opportunities have been
reviewed by PwC as part of the due diligence conducted for
Cadogan.
In exchange for providing the loan, and besides the pledge on
PMP’s current participating interest in Proger Ingegneria, CPHBV
has secured:
- The right to designate two out of the seven directors in each
of Proger and Proger Ingegneria’s Boards of Directors. One of the
two directors designated by CPHBV will be appointed as Proger’s
Chairman of the Board, with a supervisory role on financial
affairs.
-
The right to designate one of the three members in each of
Proger and Proger Ingegneria Boards of Statutory Auditors.
-
A call option to acquire, at its sole discretion, 33% of the
participating interest that PMP will be holding in Proger
Ingegneria as a result of its forthcoming subscription; the
exercise of the option would give Cadogan, through CPHBV, an
indirect 22% interest in Proger. The call option is granted at no
additional cost and can be exercised at any time between the
6th (sixth) and 24th (twenty-fourth) months
following the execution date of the loan agreement and subject to
Cadogan shareholders having approved the exercise of the call
option as explained further below. Should CPHBV exercise the
call option, the price for the purchase of the 33% participating
interest in Proger Ingegneria shall be paid by setting off the
corresponding amount due by PMP to CPHBV, by way of reimbursement
of the principal, pursuant to the loan agreement. If the call
option is exercised, then the obligation on PMP to pay interest is
extinguished.
An exercise of the call option would not only expose Cadogan to
significant and realizable growth in Proger’s business, but would
also generate several potential operational synergies, which will
support the development of both companies. For Cadogan, these
synergies could include access to additional, local specialists to
assist in developing its pipeline of opportunities, given Proger’s
presence in several countries of interest, as well as operational
synergies in Ukraine with its
service business. In recent years and, based on its current order
book, oil & gas has been a growth area for Proger and a
continuation of that trend will enhance opportunities for
Cadogan. For Proger, the benefits include leveraging
Cadogan’s upstream competences to access higher-margin contracts in
the oil & gas industry.
Cadogan, through CPHBV, intends to designate Chicco Testa (who is a current non-executive
director of Cadogan) as Chairman of Proger’s board of directors and
to confirm Guido Michelotti who is
the Chief Executive Officer of Cadogan, as a director. Guido Michelotti is already a non-executive
director of Proger and therefore has excused himself from all
meetings considering this transaction and has not been involved in
the negotiation of the loan agreement nor in the taking of any
other related decision. Guido
Michelotti does not have, nor has had in the past, any
economic interest in Proger.
Commenting on the transaction, Zev
Furst, Cadogan’s non-Executive Chairman said:
“This loan agreement creates for Cadogan’s
shareholders an exposure to a Company with material growth
potential at a balanced level of risk; it also offers both
companies the benefit of potential operational synergies for the
development of their respective businesses. The loan is in-line
with the Company’s strategy to leverage its balance sheet position
to offer such exposures, while diversifying the Company’s overall
geographic and industry risk profile.”
Listing Rules considerations
As described above, on exercise of the call option, CPHBV would
acquire the 33% of the participating interest that PMP will be
holding in Proger Ingegneria as a result of its forthcoming
subscription. The exercise of the option will give Cadogan,
through CPHBV, an indirect 22% interest in Proger. This exercise of
the call option (or the enforcement of the pledge referred to
above) would be likely to constitute a reverse takeover for
Cadogan under the Listing Rules.
In that instance, the exercise of the call option would be
subject to and require publication of: (i) a shareholder
circular and notice to convene a general meeting seeking Cadogan
shareholder approval of the proposed exercise of the call option by
CPHBV; and (ii) a prospectus in connection with the proposed
re-admission of Cadogan's shares to the Standard segment of the
Official List and to trading on the London Stock Exchange (as
Cadogan’s listing would be cancelled following the consummation of
a reverse takeover).
About
Cadogan is an independent, diversified oil and gas company,
which operates exploration and production licenses in Western Ukraine, conducts gas trading
operations, and provides services to E&P companies.
Proger is a Rome-based,
international company that offers state of the art engineering and
management expertise in a broad range of fields.
Proger has more than 60 years of experience and now sits at the
top of Italian rankings of engineering companies[2], with a
consolidated position among the top 100 international engineering
companies in the world according to ENR (Engineering News Record)
criteria. It is a general engineering company able to
guarantee the development and completion of large scale
multidisciplinary projects, offering clients a
unique point of reference during every phase.
Proger, counting on more than 1,000 professionals in 18
countries over 3 continents, develops projects in the following
sectors:
- Oil
& Gas – green energy
- Infrastructure
& Transportation
- Sustainability
& Environment
- Building
- Security
For further information, please
contact:
Cadogan Petroleum plc |
|
|
Guido Michelotti |
Chief Executive Officer |
+380 (44) 594 5870 |
Ben Harber |
Company Secretary |
+44 0207 264 4366 |
|
|
|
Cantor Fitzgerald Europe |
Broker to Cadogan Petroleum plc |
|
David Porter, Nick Tulloch |
|
+44 (0) 20 7894 7000 |
Important
Notices:
This Announcement has been issued by,
and is the sole responsibility of, the Company.
Certain statements in this
announcement are forward-looking statements. By their nature,
forward-looking statements involve a number of risks, uncertainties
and assumptions that could cause actual results or events to differ
materially from those expressed or implied by the forward-looking
statements. These risks, uncertainties and assumptions could
adversely affect the outcome and financial consequences of the
plans and events described herein. No one undertakes any obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise. Readers
should not place any undue reliance on forward-looking statements
which speak only as of the date of this announcement. Statements
contained in this announcement regarding past trends or events
should not be taken as representation that such trends or events
will continue in the future.
Neither this announcement nor the
information contained herein is for publication, distribution or
release, in whole or in part, directly or indirectly, in or into or
from the United States (including
its territories and possessions, any State of the United States and the
District of Columbia),
Australia, Canada, Japan, South
Africa or any other jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction.
The distribution of this announcement may be restricted by law in
certain jurisdictions and persons who come into possession of any
document or other information referred to herein should inform
themselves about and observe any such restrictions. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdictions.
This announcement does not contain or constitute an
offer of, or the solicitation of an offer to buy or subscribe for,
the securities referred to herein to any person in any
jurisdiction, including the United
States, Australia,
Canada, Japan, South
Africa or in any jurisdiction to whom or in which such offer
or solicitation is unlawful.
[1] Italian accounting standards, which are based on
European Union’s 4th directive. Reported figures are audited
[2] 2017 and 2018 ranking of the Top International Design firms
issued by Engineering News-Record
(https://www.enr.com/toplists/2018-Top-225-International-Design-Firms-1)