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Tuesday, November 11, 2014
Cygam Energy Inc. received a revised proposal from the Tunisian authorities regarding the sale process for the Sud Tozeur permit, in which it owns 100% stake. Rigo Oil Company Ltd., a wholly owned subsidiary of Cygam, submitted a revised proposal to the Tunisian authorities on September 11, in which Rigo and YNG Exploration Ltd. (YNG) proposed that a total of $2.5 million of the penalty would be paid to the authorities upon transfer of the Sud Tozeur permit to YNG. Of this total, $2.0 million would be funded by YNG and the balance of $0.5 million by Rigo. The further balance of $2.5 would be paid by Rigo before the end of 2015.
Following informal feedback from the Tunisian authorities, a revised and final proposal was submitted to the Tunisian authorities on September 26, 2014. In this proposal, a total of $2.5 million of the penalty would be paid to the authorities upon transfer of the Sud Tozeur permit to YNG. Of this total, $2.0 million would be funded by YNG and the balance of $0.5 million by Rigo. The balance of $2.5 would be paid by Rigo in three tranches of $0.5 million by May 31, $1 million by September 30, and the last $1 million by December 31, all in 2015.
In addition, Rigo proposed to assign a share of its revenues from the BBT Concession as security for these deferred payments.
On November 7, 2014, the Tunisian authorities requested the following changes to the proposal:
In addition, the Tunisian authorities requested a bank guarantee for the $2.5 million due by end March, 2015 plus, in the event of default, a share of Rigo’s revenues from the BBT Concession.
Rigo and YNG have scheduled a meeting with certain Tunisian authorities to discuss the situation and determine if a mutually acceptable way forward can be agreed.
As disclosed previously, the company is pursuing strategic alternatives including, recapitalization, sale of assets, merger or outright sale of the company. There can be no assurance that the company will be successful in these initiatives or in its discussions with Tunisian authorities.
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