Pharos: Citadel’s Termination of Sea Dragon Deal ‘Cash-Negative’

Pharos Research commented on the news that Citadel Capital (CCAP.CA) entered into a termination agreement with Golden Crescent Investments, an Opportunity-Specific Fund controlled by the firm, to end the previously announced sale of the National Petroleum Company (NPC) to Sea Dragon Energy due to the uncertainty regarding the date of sale as well as ongoing economic turbulence locally and internationally.

Pharos’ Hamza Al-Assad described the termination of the sale agreement as cash-negative as well as strategically-negative in as much as it continues to undermine CCAP efforts to exit from non-core investments and increase its stakes in core investments.

“In March 2011, CCAP had agreed with Sea Dragon to purchase NPC for a total consideration of $147.5 million, split into $87.5 million in the form of Sea Dragon shares and $60.0 million in cash. It is interesting to note that the deadline for Sea Dragon to finalize the sale was set at 10 August 2012”, he added.