Po Valley retains Italy assets following mutual termination of Saffron deal
JOHANNESBURG (miningweekly.com) – Australia-based gas producer Po Valley on Thursday announced that it would retain its northern Italy gas assets, after a deal with UK firm Saffron Energy for the sale of Po Valley Operation (PVO) was terminated.
The transaction formed part of a broader three-way commercial deal to create a large European oil and gas business and from which Saffron intends to expand its interests to include South East Asian oil and gas assets.
ASX-listed Po Valley reported on Thursday that the decision to terminate the transaction, announced in January this year, was mutual and followed discussions between the companies' tax advisers and the Australian Taxation Office (ATO).
The sticking point was the 200-million shares in Saffron that Po Valley would receive for its northern Italy operations. Po Valley reported that its tax advisers were of the view that a favourable class ruling to grant demerger relief to Po Valley shareholders would be unlikely for the in-specie distribution of these shares.
Further, BDO Corporate Finance that was tasked with delivering an independent experts report was of the view that the transaction was “neither fair, nor reasonable”, particularly as a result of the independent experts’ valuation of the Selva and Teodorico gasfields.
Po Valley stated that, despite terminating the PVO sale, it remained supportive of the proposed Saffron and Coro transaction and the acquisition of Aim-listed Sound Energy Italy Holdings by Saffron.
Po Valley holds 100-million shares in Saffron and it said that it intended to vote in favour of the other transactions.
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