Notice of Business Rescue Resolution Passed by a Material Subsidiary
EFORA ENERGY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE Share Code: EEL ISIN: ZAE000248258
(“Efora” or “the Company”)
NOTICE OF BUSINESS RESCUE RESOLUTION PASSED BY A MATERIAL SUBSIDIARY
1. Further to the announcement issued on 14 April 2021, the board of directors (“the Board”) of Afric Oil Proprietary Limited (“Afric Oil”), a material subsidiary of the Company, has advised that it is unable to operate the business with restricted access and use of its assets.
2. Further to the announcement made on 14 April 2021, the Board of Afric Oil on 16 April 2021 resolved that the best option to ensure the long-term survival of Afric Oil is to consider business rescue as contemplated in Chapter 6 of the Companies Act No. 71 of 2008, as amended (“the Companies Act”).
3. Afric Oil has been involved in ongoing negotiations with its creditors, some of whom have indicated strong support to allow the business to trade out of the current predicament, provided the Afric Oil proposes an acceptable recovery plan.
4. The Board of Afric Oil considered the financial position of the company and resolved on 16 April 2021 that:
4.1 it is financially distressed, due to the fact that it is reasonably unlikely that Afric Oil will be able to pay all of its debts, as they become due and payable, within the immediately ensuing six months;
4.2 there appears to be a reasonable prospect of rescuing Afric Oil; and
4.3 the Company voluntarily begin business rescue proceedings, in accordance with section 129(1) of the Companies Act.
5. Afric Oil has appointed Mr. Phahlani Mkhombo and Mr Moses Singo as the business rescue practitioners.
6. Shareholders are advised that the Board of Afric Oil will no longer be in control of the company, as it will be placed under the supervision of the appointed business rescue practitioners.
7. There are ongoing negotiations with third parties regarding the provision of post- commencement finance and accordingly, there are disparate levels of information in the market which cannot be remedied by the immediate publication of announcements to clarify the situation.
8. With the material discussions to be undertaken with all stakeholders, the risks of leaks of price sensitive information is great, which could result in different levels of information in the market.
9. The nature and extent of the restructure pursuant to business rescue proceedings, and its effect on the value of the company, is unknown. At this stage, it is uncertain which of Afric Oil’s operations will continue and on what basis, following the conclusion of the business rescue process .
10. The Board of Afric Oil considers this decision to be prudent and in the best interests of shareholders while the company and its business rescue practitioners explore solutions to the current situation facing the company.
11. Shareholders will be updated as further material information becomes available and are advised to exercise caution in relation to the Company.
20 April 2021
Sponsor PSG Capital
For further information please contact:
Efora Energy Limited
Efora Energy Limited is a South African based independent African oil and gas company, listed on the JSE. The Company has a diverse portfolio of assets spanning production in Egypt; exploration and appraisal in the Democratic Republic of Congo; a midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout Southern Africa. Our focus as a Group is on delivering energy for the African continent by using Africa’s own resources to meet the significant growth in demand expected over the next decade.
IMPORTANT NOTICE TO SHAREHOLDERS REGARDING THEIR SHARES
If you are in any doubt as to what action you should take, consult your CSDP, Broker, Banker, Legal Adviser, Accountant or other professional advisers immediately.
Or visit our Shareholder Information page for more information regarding your shareholding and share certificate.