A multi-million takeover offer for Australian company Liquefied Natural Gas Ltd (LNGL) has fallen through, sending its shares down by more than 35 per cent today.
The Perth-founded company had received an offer from private Singaporean group LNG9 in late February, priced at US13 cents per share and valuing the target at $US75 million ($A115 million).
LNGL told its shareholders that by accepting the offer they avoided risk of the company entering into administration or liquidation, citing its existing cash was “insufficient to sustain operations beyond the current quarter”.
The company, formerly based in West Perth, told the market today LNG9 no longer intended to despatch its bidder’s statement after funding from First Wall Street Capital Corp fell through.
LNGL says, however, the Singaporean company “remains interested in acquiring all or a material part of LNGL or its assets”.
Both companies will work to negotiate a mutually acceptable transaction, LNGL says.
“In addition to ongoing discussions with LNG9, the company is now working with other parties on strategic alternatives that supplement existing cash on hand to improve LNGL’s working capital position and sustain its operations,” LNGL said.
The company is seeking to develop the Magnolia and Bear Head LNG projects in the US and Canada, respectively.
LNGL says its existing cash reserves, supported by a recent $US388,552 loan ($A605,353) from the United States Small Business Administration, will allow the company to meet commitments until May.
“LNGL must secure additional meaningful funding urgently to continue operating beyond then,” the company said.
Its shares were down 36.5 per cent at 3:00pm AEST to trade at 7.3 cents.
