06/06/2014 - 15:38

Stakes raised in Seven’s Nexus takeover

06/06/2014 - 15:38

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Cash-strapped oil and gas company Nexus Energy has warned shareholders it will likely be forced into administration if a planned takeover by Seven Group Holdings fails to win approval.

Stakes raised in Seven’s Nexus takeover
Seven Group Holdings chairman Kerry Stokes.

Cash-strapped oil and gas company Nexus Energy has warned shareholders it will likely be forced into administration if a planned takeover by Seven Group Holdings fails to win approval.

Nexus this week revealed it had been informed by its joint venture partner Shell of unexpected cost increases to the pair's Crux gas project.

The revised forecasts mean Nexus will have to pay at least a further $5 million to $10 million on drilling activities at the project, handing Seven Group the right to terminate a merger implementation agreement between the two companies.

Nexus told shareholders today that the Kerry Stokes-chaired Seven Group had agreed to grant waivers in regards to the cost increases but only if Nexus shareholders approve the planned takeover.

If the scheme is not approved, Nexus says it will be forced to either secure "adequate and immediately available" funding or appoint administrators to the company.

Should Nexus call in administrators, Seven Group has indicated it will look to acquire the company or its assets through the administration process or by enforcing its rights as a secured creditor.

Nexus entered a trading halt this afternoon as it awaits an announcement from Seven Group regarding its intentions in the event that Nexus shareholders do not approve the planned takeover.

Shareholders are due to vote on the scheme in Melbourne next Thursday.

Nexus shares last traded at 1.7 cents.

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