Corporate M&A

Waterford Raises Stake in Gulfsands, Makes Mandatory Offer for Remaining Shares

By Malavika Sharma
March 23, 2021
2 minutes read
Desert Sand Dunes

Waterford Finance & Investment Ltd., a privately held investment vehicle owned and controlled by Michael Kroupeev, has entered into a binding agreement to purchase 85,077,086 ordinary shares in AIM-listed E&P company Gulfsands Petroleum Plc from ME Investments Ltd., for a total cash consideration of approximately £3.43 million.

In addition, MEI has also agreed to novate to Waterford its rights and obligations under a convertible loan facility provided to Gulfsands in early 2017. The convertible loan will now be wholly owned by Waterford along with another significant shareholder, Blake Holdings Ltd., which currently holds a ~31.5% stake in the company.

Guernsey-incorporated Waterford has been an investor in Gulfsands since 2011, and held a ~37.3% stake in Gulfsands prior to the purchase from MEI, that will now increase to over 52%.

In keeping with UK Takeover Code rules, Waterford is now required to make a mandatory cash offer for the remaining shares of the company that it does not already own. Waterford’s current cash offer of 4.035 pence for each Gulfsands share values the total current issued share capital of the company at approximately £22.67 million.

For the purpose of the mandatory offer, Waterford will act in concert with Blake and James Ede-Golightly, the former non-executive chairman of Gulfsands and an associate of Blake. Blake itself is controlled by Richard Griffiths, the founder and former chairman of The Evolution Group Plc, a UK-based brokerage and fund management firm that was acquired by Investec Plc in 2011.

London-based Gulfsands is focused on exploration and development projects in the Middle East. Its primary asset is 50% operated interest in Block 26 in north-eastern Syria, which has been under force majeure as a result of the EU’s sanctions on the country since 2011. Chinese state-owned Sinochem Group holds the remaining 50% in the block. In addition, Gulfsands also holds an exploration license in the Llanos basin in Colombia (currently suspended due to environmental issues).

finnCap is advising Waterford on both the purchase from MEI and the mandatory offer. Arden Partners is advising Gulfsands on the mandatory offer.

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