Australia's Armour still in talks with China's Shunkang over potential acquisition

Sydney-listed energy company Armour Energy on October 20 said that it is still in talks with China's Shunkang Holding Group over a potential acquisition, but that no agreement has yet been reached.

Armour received a takeover offer from Shunkang in August, and the two companies have since progressed to a due diligence phase.

“Armour has continued to engage with Shunkang regarding a proposed transaction and are continuing to negotiate key commercial aspects of a potential transaction and, whilst progress is being made, no agreement has yet been reached with Shunkang,” it said.

Under the proposed deal, Shunkang would acquire all of the issued ordinary shares of Armour for cash consideration. The proposed acquisition price falls within the range of A$0.13 to A$0.15 in cash per share of Armour.

Shunkang would also either provide funding to Armour to redeem the outstanding secured amortising notes or acquire some or all of the outstanding secured amortising notes and agree to an extension to their maturity date.

In addition, Shunkang would either acquire the outstanding Armour convertible notes at face value or provide funding to Armour to enable the notes to be redeemed at face value or for convertible notes to be otherwise cancelled by the company.

Armour is also seeking that Shunkang will provide Armour with loan funding to fund Armour’s working capital requirements through the scheme process.

Shunkang Group is a conglomerate headquartered in Shanxi, China, involved in a range of industries including real estate development, international trade, technical research, commercial operations, tourism, and hospitality. Established in 2002, Shunkang Group has offices in Australia and the US.