CLIQ’s woes puts spotlight on O&G SPACs

PETALING JAYA: The resignation of CLIQ Energy Bhd's principal adviser at such a critical period when the company is racing against time to complete its qualifying asset acquisition, will have a negative impact on other oil and gas special purpose acquisition companies (SPAC), said analysts.
"It will be negative in the sense that investors will lose confidence in SPACs, coupled with the strengthening of the US dollar has made acquisitions look more pricey. Even in the current low oil price environment, it is difficult for them (SPACs) to secure good assets because the sellers already know how much money they have on the table, so the SPACs will have lesser bargaining power," said an analyst who declined to be quoted.
Except for Hibiscus Petroleum, other oil and gas SPACs – Sona Petroleum Bhd and Reach Energy Bhd still haven't completed their qualifying asset acquisitions as yet.
The analyst, therefore, foresees a "challenge" for Sona Petroleum and Reach Energy to complete their acquisitions during these tough times following CLIQ's obstacles in obtaining approval for its qualifying acquisition.
Another analyst highlighted that while it is a good time for oil and gas players to pursue acquisitions, financing is another big issue as banks are tightening lending requirements.
CLIQ, the second oil and gas SPAC to be listed on the local bourse, needs to have its qualifying asset in place by April 9, a three-year period after its listing on April 10, 2013.
According to sources, the resignation of Maybank Investment Bhd (MIB) as the principal adviser of CLIQ Energy Bhd is due to MIB's refusal to submit the company's updated application to the Securities Commission (SC).
The source explained that there was a conflict between CLIQ and MIB on the definition of "complete" document.
"The refusal by MIB to submit CLIQ's updated application has resulted in SC returning CLIQ's earlier submitted application for being 'incomplete' due to no updated application submitted," it said.
CLIQ urgently needs to appoint a new principal adviser to submit its updated application, as per the SPAC listing guidelines.
It is learnt that CLIQ plans to resubmit the application in the middle of this month as the updated information is ready.
"They will appeal to SC if the application is not approved by SC," the source added.
Last Friday, CLIQ Energy announced that it had received a letter from SC on the rejection of approval due to incomplete information submitted for its proposed acquisition of two oil field blocks in Kazakhstan, for US$110 million (RM455 million).
When contacted, CLIQ declined to comment, except to say that an official statement will be issued at a later date.
The SC is unlikely to extend the duration of time for CLIQ to fullfil the listing requirement.
CLIQ's share price was unchanged at 69 sen yesterday, with 13.3 million shares changing hands.