debt facility appears more likely option

Nexus Energy: Debt facility appears more likely option as Crux sale proves difficult - source

Nexus Energy, the Australian-listed energy group, appears more likely to proceed with a funding package than the sale of its 85% stake in Crux, it is understood. It will not do both.

Nexus, which was placed in a trading halt Monday, requested a suspension until March 18 "while it progresses negotiations in relation to asset sales, debt raising alternatives and significant contractual obligations,"
A Nexus insider said these three options are not mutually reliant on the other and that the company would announce its results on Friday or Monday.
In October Nexus said it was running a global sale process for an interest in the AC/P23 exploration permit, including the Crux liquids project, in the Browse Basin, offshore Western Australia. Nexus owns 85% of the Crux liquids rights.
It is understood that this sale is proving difficult. While the process is still alive with interested parties still in the data room there has been little success in drumming up a competitive bidding process, especially where the asset requires development capital. As a result proposals have not proved acceptable to Nexus in the available timeframe. Deutsche Bank, mandated to run this sale process, is not involved in the debt alternative where it is understood that Nexus is talking to banks and private investors to arrange a funding package.
It is further understood that a corporate sale is not on the cards in the short term.
The insider said Nexus would entertain offers at a corporate level but it was focused on its three options outlined earlier this week. The insider added a rights issue "is not being considered" and that the sale of its Crux stake has seen some parties fall away and others join since it started in October. The insider noted broker valuations of this 85% stake in Crux varied from AUD 500m to AUD 1.5bn, the wide range being attributed to different oil price projections.
Meanwhile sources at listed Australian group ROC Oil which has reduced its stake in Nexus from around 10% to just under 7% say ROC is still a seller and have not heard what Nexus is planning to announce or been involved in discussions with any party around its Nexus stake.

Size : 100m - 500m (AUD)
Value : 294 m AUD (Nexus market cap)
Stake Value : N/A
Grade : Strong evidence
Alert : Australian M&A Intelligence

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