UK-based gas producer Energean announced on Friday the termination of its $945 million asset sale agreement with private equity firm Carlyle. The deal, which was first struck in June of last year, was abandoned due to prolonged delays in securing regulatory approvals in Italy and Egypt.
The agreement would have allowed Carlyle to form a new Mediterranean-focused oil and gas company, headed by former BP CEO Tony Hayward, utilizing Energean’s assets in Egypt, Italy, and Croatia.
Energean CEO Mathios Rigas expressed disappointment over the failure to secure the necessary approvals but reassured stakeholders that the decision would not alter the company’s strategic direction or commitment to growth and shareholder returns. “While I am disappointed that Carlyle was unable to obtain the necessary approvals in Italy and Egypt, I want to reaffirm that this outcome does not change our strategic direction or our commitment to growth and shareholder returns,” Rigas stated.
The two companies failed to reach an agreement on extending the long-stop date beyond March 20 to meet the conditions of the deal. In response, Carlyle said, “Carlyle made significant and extensive efforts in good faith to close the transaction but ultimately was not able to satisfy all of the conditions precedent.”
Energean, which operates in eight countries across the Mediterranean and the UK North Sea, reported an increase in annual profits but disclosed asset impairment charges of $241 million related to assets in Egypt, Morocco, and Greece. Despite the deal’s collapse, Energean confirmed that its current dividend policy would remain unchanged.
During a post-earnings call earlier this week, Rigas also clarified that Energean had not initiated the sale process for its assets and was not seeking another buyer.
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