Seven target Nexus warns of financial woes

Company News

by Lelde Smitts

Seven Group Holdings Limited (ASX:SVW) takeover target Nexus Energy Limited (ASX:NXS) has warned it will need to go into voluntary administration if it cannot seal a deal to sell the company.
In statements released after the market closed on Friday Nexus also revealed it could face an $18 million writedown on its Longtom offshore gas-processing facility if Seven’s takeover is unsuccessful. 
Nexus says Seven has purchased almost 67 per cent of its subordinated notes and senior debt to satisfy one of the many conditions of the takeover and allow Nexus to meet its near term capital requirements.
Seven and Nexus entered into a conditional merger implementation agreement at the end of March which will be put to a shareholder vote in June.
Seven has proposed to buy Nexus shares for $0.02 cash per share, about one third of the company’s last traded price of $0.059. The suspension of trading in Nexus’s securities is set to continue. 
Seven Group Holdings reported a net profit of $265 million in the first half of the 2014 financial year.

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