Asiasons' Black Elk stake buy in limbo as SGX questions authority
SINGAPORE (Reuters) - Asiasons Capital Ltd (ASNS.SI) said on Thursday the Singapore Exchange (SGX) (SGXL.SI) believes it does not have a strong enough mandate for a share issue which it planned to finance the purchase of a stake in a U.S. oil and gas firm.
The exchange's move has thrown into question whether the investment company's plan to buy a 27.5 percent stake in Black Elk Energy Offshore Operations LLC for $171.65 million can go ahead.
Asiasons said last month it planned to fund the purchase by issuing 194.6 million new shares at S$1.1948 each. Black Elk is an oil and gas exploration and production company based in Houston and with assets mainly in the Gulf of Mexico.
The SGX, the bourse operator and regulator, told Asiasons on Wednesday that it had not satisfied a rule that would give it the authority to issue the new shares, the company said in a stock market filing on Thursday.
"The company shall engage with Black Elk and the seller to revisit and relook (at) the terms and conditions of the proposed acquisition," Asiasons said in a statement.
If the deal were to go ahead, Black Elk would have been Asiasons' second acquisition of resource-based companies after the purchase of 10 percent of Singapore-listed gold miner LionGold Corp Ltd (LION.SI).
Shares in Asiasons, along with LionGold and Blumont Group Ltd (BLUM.SI), are currently subject to trading restrictions imposed by the SGX after their prices fell heavily earlier this month.
The SGX has declared all three stocks "designated securities" and is investigating short-selling in Asiasons and Blumont last week when they were subject to those trading curbs.
Several brokerages in Singapore could lose millions of dollars in the wake of the price falls in those three companies, traders said.
Asiasons shares were last traded at S$0.108, having hit an all-time high of S$2.91 in September.
(Reporting by Eveline Danubrata; Editing by Rachel Armstrong and Stephen Coates)