It appears our worst fears will be realized.An article in the...

It appears our worst fears will be realized.


An article in the Australian.


"SEVEN Group Holdings chief Don Voelte appears to be engineering a low-ball bid for the struggling Nexus Energy, from which he stepped down as chairman last month and which is facing administration as early as today if refinancing issues are not resolved.

The deal, if it passes muster with the Nexus bondholders Seven would need to buy out, would see shareholders that Mr Voelte previously represented receive just a third of the 5.9c per share value their stock last traded at.

The involvement of the Kerry Stokes-run Seven finally sheds light on the controversial February move by Mr Voelte to abruptly step down as Nexus chairman, citing a conflict of interest.

Nexus faces administration because an electrical problem that has shut down most of its only cash-producing asset - the Longtom gas field in Bass Strait-- means it is struggling to meet debt obligations.

At the same time, Nexus has been unable to come good on a year-long effort to sell either the company or its stake in the Shell-operated Crux gas and liquids field in Western Australia’s offshore Browse Basin.

The proposed deal, which confirmed speculation that Mr Stokes and Mr Voelte were interested in Nexus, was revealed by the Debtwire news service.

Seven is said to be offering to pay out the $117.6m of unsecured Nexus bonds at 89c in the dollar, after which it would bid for the rest of the company at about 2c per share.

It appears the deal would be a cash offer, leaving Nexus shareholders no option to stay with the company’s assets.

In that event, the choice for Nexus shareholders would be whether or not to take the 2c or risk liquidation and the sale of Crux and other assets, leaving them with a lot less after all other obligations were met.

On the other hand, if Seven does strike an agreement with the bondholders and makes a bid, it is likely to drive into the open any serious potential buyers previously courted by Nexus chief Lucio della Martino.

Potential bidders for Nexus’s 15 per cent stake in Crux include Shell and ConocoPhillips, which Nexus has previously said it is not in talks with.

The Debtwire report, which did not name its sources, said bondholder Tor Investment Management was yesterday holding out for a better offer, while two bondholders that initially opposed the Seven proposal had joined others in agreeing to it.

If a deal with Hong Kong-based Tor, which has $29m of bonds and an effective blocking stake, was not reached by last night, Nexus faced administration by early next week, the report said. The bid would value Nexus equity at just $27m, but would see Seven paying out just over $200m when taking Nexus’s debt into account. The value of Nexus’s 15 per cent Crux stake was implied at $560m in a 2012 sell-down of its once larger stake in the project to Shell."