Petroleum Africa
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Monday, February 23, 2015
Mart Resources, Inc. is the latest firm to launch a strategic review of its holdings and financial position given the current industry downturn. Mart joins firms like Candax Energy and Sacoil who are both considering their options in Africa, as well as Tullow Oil who placed its drilling projects under review in November.
The company initiated a process to identify, examine and consider strategic and financial alternatives available with the ultimate view of enhancing shareholder value. Toward this end a special committee comprised of independent directors was appointed to oversee the process.
According to Mart the strategic and financial alternatives may include, but are not limited to, the sale of the company, merger or other business combination, sale of all or a portion of its assets or any combination thereof, and continued execution of its business plans, among all other alternatives.
The Board has determined that it is timely to review the company’s strategic direction in light of reduced commodity prices and its future capital requirements. In this regard, Mart’s management is currently working with its existing Nigerian lender to restructure its debt facilities in order to provide more flexibility in funding the development of the Umusadege field.
It is Mart’s current intention not to disclose developments with respect to the strategic review process until the Board has approved a specific transaction or otherwise determines that disclosure is necessary or appropriate. The company will continue to provide monthly operational and quarterly financial updates. There is no assurance that the strategic review process will result in a transaction or, if a transaction is undertaken, what the terms or timing of such a transaction will be.
Mart also revealed that thespecial committee would also be investigating whether certain actions undertaken by Wade G. Cherwayko, Mart’s CEO, complied with the company’s Code of Conduct and internal policies. Cherwayko’s executive authority has been limited during the course of the investigation but he will continue to advise the Board with respect to matters involving the company’s Nigerian co-venturers and Nigerian lenders. The special committee does not intend to make any further public statement with respect to this matter until the investigation is complete.
Derrick Armstrong, an independent member of the Board and retired senior securities lawyer with over 30 years of legal experience, has been appointed as Chairman of the Board and will chair the special committee.
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