MMP Resources terminates term sheet for Russian acquisition

MMP Resources has terminated the term sheet for its proposed acquisition of a 50 per cent stake in a Russian company that holds the legal and beneficial interests in an operating gas field in the north-west region of Russia.

In a filing to the Singapore Exchange on Friday, MMP said: "The board wishes to announce that due to laws on foreign investment restrictions in Russia, the proposed acquisition is undergoing a strategic asset review. Based on the expected timeframe of the foregoing review, the board is of the view that whilst there are clear and strategic benefits to the proposed acquisition, taking into consideration the lengthy period of time that may be required to satisfy the conditions precedent relating to the approvals to be obtained from the relevant Russian authorities, it may not be in the best interests of the company to proceed with the proposed acquisition."

Thus, MMP Resources has agreed with the vendor to terminate the term sheet, MMP added.

In December last year, MMP said that it entered into a term sheet to acquire a 50 per cent stake in a joint venture company that owns an operating gas field in Russia for S$25 million from Lloyds Energy Ltd, a "gas to wire" liquefied natural gas (LNG) player which produces, stores and sells LNG.

The joint venture company owns the Asia One gas field in Russia's north-west region, valued at S$50 million by MMP-appointed independent valuer Gaffney, Cline & Associates.