Renergen disputes MGE’s exercise of put option

Renergen has issued a statement in response to Mahlako Gas Energy's (MGE) notice regarding its purported exercise of the Put Option related to its investment in Renergen's subsidiary, Tetra4.

Tetra4 holds South Africa’s first and only onshore petroleum production right issued by the Department of Mineral Resources and Energy. 

As previously announced on December 27, 2023, Renergen entered into a transaction agreement with MGE for an investment in Tetra4 through a sale, subscription, and shareholders agreement, which was initially classified as a category 2 transaction in terms of the JSE Listings Requirements.

However, MGE has now notified Renergen of its intention to exercise the Put Option, which it claims has been triggered by a so-called "Put Option Event."

A put option is a contract that gives the buyer the right, but not the obligation, to sell an underlying asset (like a stock) at a specific price.

Renergen said, "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."

Renergen further said that MGE's actions, which the Company believes are premature and unsupported by the terms of the agreement, lack legal merit. Renergen has stated that the dispute will be resolved via the dispute resolution mechanisms outlined in the Transaction Agreement, although the process may take time.

Renergen said it is confident that the matter will be settled according to the prescribed procedures and has assured shareholders that its core business operations and strategic direction remain unaffected by this ongoing dispute. The company will continue to focus on the development of the Tetra4 project and will keep shareholders informed of any material developments requiring further disclosure.

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