Po Valley Energy Ltd., Perth, and Saffron Energy PLC have reached an agreement to not proceed with the sale of Po Valley Operations Pty. Ltd. (PVO) and its north Italian gas assets to Saffron for a consideration of 200 million Saffron shares.
The decision was mutual and follows recent discussions with Po Valley’s tax advisers and the Australian Taxation Office plus the receipt of an independent expert’s report.
Po Valley’s tax advisers judge that a favorable class ruling to grant demerger relief to Po Valley shareholders will be unlikely for the in-specie distribution of the 200 million Saffron shares.
The independent expert, BDO Corporate Finance (WA) Pty. Ltd., operating under the Australian Securities and Investment Commission (ASIC) guidelines, found that the transaction was “neither fair nor reasonable,” particularly as a result of its valuations of the Selva and Teodorico gas fields in northern Italy.
Po Valley said it is confident that its shareholders will benefit from less dilution of, and increased focus on PVO’s assets which include 63% interest in the Selva gas development, 100% of the offshore Teodorico gas field development, and 100% of the Torro del Morro oil and condensate exploration.