10/12/2008 - 14:31

Aviva terminates $22 million merger

10/12/2008 - 14:31

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Perth-based energy group Aviva Corp has terminated its $22 million merger with Canadian coal producer Northern Energy and Mining Inc due to a lower than expected interest in a project.

Aviva terminates $22 million merger

Perth-based energy group Aviva Corp has terminated its $22 million merger with Canadian coal producer Northern Energy and Mining Inc due to a lower than expected interest in a project.

Under the agreement, announced in October, the pair would have combined the Peace River metallurgical coal mine, partly held by NEMI, with Aviva's proposed $1 billion Coolimba power station in WA and the Mmamantswe coal project in Botswana.

Toronto-listed NEMI was to acquire all the issued share of Aviva through a scheme of arrangement, with shareholders to receive 0.59 NEMI shares - in the form of CHESS Depository Interests - for each Aviva share.

However, Aviva said today that NEMI advised that errors in determining the partners' historical cash calls in the Peace River partnership had been made and hence their interest in the partnership had been affected.

"The effect of this error was to reduce NEMI's interest from an expected 16-17 per cent to approximately 12 per cent," Aviva said.

Under the agreement this allows Aviva to terminate the agreement and call for a $C1 million break fee, the company said in a notice to the Australian stock exchange.


 

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