Energean PLC's (LSE:ENOG) shares fell 7% on Monday as uncertainty loomed over its planned sale of assets in Egypt, Italy, and Croatia to Carlyle International Energy Partners.
The deal, announced last year, depends on regulatory and antitrust approvals in Italy, Egypt, and the Common Market for Eastern and Southern Africa (COMESA).
With the 20 March deadline fast approaching, Energean has warned that some key approvals are still outstanding, and there’s no guarantee they will come through in time.
Adding to concerns, Energean and Carlyle haven’t agreed to extend the deadline. So, if the required approvals aren’t secured by Thursday, the deal could collapse.
“This is a big worry for ENOG as they have committed a large capex programme on the assumption of receiving funds from Carlyle and also not having to spend any money on the assets in Egypt, Italy and Croatia,” Panmure Liberum analyst Ashely Kelty said in a note.
“If the deal falls away, the strain on the balance sheet will be markedly higher, albeit there will be some additional revenue coming in to cover some of it.”
Peel Hunt analyst Werner Riding, meanwhile, commented: “Having spoken with management, in spite of it appearing seemingly unlikely, Energean still remains committed to fulfilling the transaction.
“Management indicated that regardless of the proposed disposal outcome, the company maintains its commitment to maximizing shareholder returns via dividends, reducing debt, and pursuing growth.
“We intend now to engage with management and to update our asset model to reflect the impact of the potential near-term reinclusion of the assets that are due to be sold.”
The stock was down 82p at 858.5p.