KAR 0.88% $1.13 karoon energy ltd

Lost in Translation (PBR's v2)

  1. Ya
    6,334 Posts.
    lightbulb Created with Sketch. 2508
    PBR put out a clarification on its last release about Bauna Sale, to sort out the confusion on the 180mil cashflow 2b retained by KAR & balance of 150mil to be paid by KAR. See attachment.

    https://s3.amazonaws.com/mz-filemanager/25fdf098-34f5-4608-b7fa-17d60b2de47d/545d40bd-8fa6-474e-a486-1548bd0a55f3_comunicado%20esclarecimento%20bauna%20_final_ing.pdf

    -----

    Rio de Janeiro, July 28, 2020 - Petróleo Brasileiro SA - Petrobras, clarifies that, in relation to a news article
    published in the media today regarding the divestment of the Baúna field, the expected reduction of
    US$380 million in the transaction's firm value is a price adjustment to exclude the amounts already
    received by Petrobras.
    Price adjustments are a common practice in acquisition and divestment transactions since the base date
    of the offer is different than the actual date the transaction is completed. The firm value of US$380 million
    announced for transaction was calculated for the January 1, 2019 base date and, therefore, will be
    adjusted according to the asset's cash flow incorporated by Petrobras from January 1,2019 until the actual
    transaction closing date. The result obtained during this period must be reverted to Karoon due to the
    sale of 100% of the field and in compliance with the contractual terms since the economic evaluation and
    purchase proposal for the asset were based on the transaction's announcement date, which was January
    1, 2019.
    As this is an active production field that generates a positive cash flow, the adjustment and the deposit
    must be discounted from the agreed firm amount.
    As disclosed in the Material Fact released on July 24,
    2020, Petrobras already received a deposit of US$49.9 million on on July 24, 2019, the date the transaction
    was signed, and will receive US$150 million on transaction closing date. It is also estimated that, after
    excluding the deposit, the amount to be paid at the closing of the transactions and the adjustments as
    explained above, there will still be an outstanding portion due 18 months after the transaction has been
    concluded.
    Additionally, the parties agreed that a contingent portion of the price, in the amount of US$285 million,
    is to be received by 2026.
    Finally, Petrobras reinforces its commitment to being fully transparent with its divestment projects and
    portfolio management, and informs that the transaction's conclusion will be disclosed to the market in
    accordance with the Company's Divestment Systematic.
 
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