PERTH (miningweekly.com) – ASX-listed oil and gas developer Nexus Energy has signed a merger implementation agreement with fellow-listed diversified investment group Seven Group Holdings.

Under the terms of the agreement, Seven Group Holdings would acquire all Nexus’ ordinary shares for 2c each in cash. The investment group has also entered into a conditional agreement to acquire subordinate loan notes issued by Nexus representing more than 66.67% of the aggregate face value of all notes.

Further, the two companies have entered into a A$40-million four-month bridge facility agreement, to provide Nexus with sufficient funding to meet its working cost requirements at the Longtom project, near-term capital commitments, and corporate expenses.

The merger implementation agreement, which has been unanimously recommended by the Nexus board, was conditional on both shareholder and regulatory approval, as well as an independent expert report.

Nexus told shareholders on Monday that the company had considered various strategic options, including selling down an interest in its assets or taking on a joint venture partner, but had concluded that a merger agreement with Seven Group Holdings was the best option for the company.

Seven Group Holding’s executive chairperson, Kerry Stokes, said that the proposed acquisition of Nexus would be an excellent investment for the group, provided that there was an immediate capital injection into the company within the next several weeks.

“The investment provides Seven Group Holdings with an opportunity to invest in a business with quality assets and with strong growth prospects that will provide long-term value. Realisation of the ultimate value of these assets will require substantial capital investment over time,” Stokes added.

Nexus’ key assets include the producing Longtom gas project, in the Gippsland basin, the Crux development licence, in which it holds a 15% interest, and the Echuca Shoals gas exploration concession, in the Browse basin.

Seven Group has estimated that Nexus would require some A$400-million in funds over the medium term, which included funding for drilling obligations and litigation settlements.