Renergen to dispute MGE's exercise of put option
JSE- and ASX-listed Renergen has informed shareholders that Mahlako Gas Energy (MGE) has given it notice that it elects to exercise a put option under a December 2023 agreement between MGE and Renergen's Tetra4 subsidiary.
Under the terms of the December 2023 agreement, MGE agreed to provide Renergen with a R550-million investment in return for a 5.5% interest in Tetra4.
At the time, Renergen also granted MGE's one owner Mahlako Energy Fund (MEF) an option to sell the shares in Tetra4 should certain events occur.
MGE has now informed Renergen that it intends to exercise that option, which would result in Renergen having to repurchase MGE's shareholding in Tetra4.
"Renergen categorically disputes that the put option has been lawfully or validly exercised and that it has consequently given rise to the aforementioned share transaction.
"Further to this, and resulting from the invalidity of the exercise of the put option, Renergen also disputes that the option transaction agreement has validly come into existence and will be challenging same," it notes in a statement to shareholders.
It adds that it is confident that MGE's "purported and premature exercise of rights, that have not arisen in the circumstances, and that may never come to fruition, is devoid of legal merit".
The December 2023 agreement includes comprehensive dispute resolution mechanisms to address such matters and Renergen expects the dispute to be resolved through those prescribed processes in due course.
Renergen stresses that its core business operations and strategic direction remain unaffected by this commercial dispute and that it continues to focus on the successful execution of its business plan and the development of the Tetra4 project, in South Africa.
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