TMK to consolidate 100% ownership of Mongolian CBM project
ASX-listed Talon Energy has signed a binding heads of agreement with TMK Energy to consolidate ownership of the Gurvantes XXXV CBM project in Mongolia to TMK, the companies announced on October 11.
Under the transaction, TMK will retain Talon's 33% earned interest in the project via the acquisition of Talon's wholly-owned subsidiary, Talon Energy Pte. The total consideration for Talon's 33% earned interest in the project is the issue of up to 1.1bn fully paid ordinary shares and up to 550bn listed options, TMK said.
The proposed acquisition remains subject to both Talon and TMK shareholder approval, which is expected to be sought in late November, with the completion of the transaction in early December. Under the transaction, Talon will contribute a further A$850,000 towards the project.
TMK CEO Brendan Stats said that the proposed transaction has been structured in a way that is highly value-accretive for existing TMK shareholders through the consolidation of 100% of the project with minimal dilution and provides the incoming Talon shareholders with a zero-cost exposure to the enormous potential of the Gurvantes XXXV project.
Meanwhile, Talon said that the proposed transaction with TMK does not impact or change the scheme consideration that its shareholders could receive under the proposed scheme of arrangement between Talon and Strike Energy.
On August 14, Talon entered into a binding scheme implementation deed with its joint venture partner Strike under which Strike will acquire all the issued shares in Talon. Strike is offering Talon shareholders 0.4828 new Strike shares for each Talon share held. Strike holds a 55% interest in the Walyering project in the Australian Perth basin and Talon owns the remaining 45%.
Talon and Strike have executed a restated and amended scheme implementation deed on October 10 to reflect and enable the proposed transaction with TMK. Other than certain minor amendments to allow for the proposed transaction with TMK, the revised deed is in substantially the same form as the original scheme implementation deed released in August, TMK said. There is no change to the consideration payable under the scheme following this revised deed.
The directors of Talon Energy have unanimously recommended that the company shareholders vote in favour of Strike Energy's takeover proposal.