On the face of it getting out of a $1,300,000 liability for $100K looks like good business. Sadly this is yet another smoke and mirrors exercise from the disgraced CEO Lofgran. The CEO who loaned 150,000,000 of his own shares to YAGlobal to assist them in shorting/destroying his own shareholders & company value. You can read all about Lofgran’s despicable betrayal HERE.
Reading todays RNS it slowly becomes apparent that all of TransGlobes liabilities pre NTOG taking their 25% stake in East Ghazalat have now been transferred to NTOG & their partner Independent Resources (LON: IRG). Those liabilities are a ticking financial time bomb. Here’s why. For a company big or small to waive a hard cash $2,300,000 payment in exchange for off loading their liabilities on an asset, they sold, must mean that there are liabilities. If there were NO liabilities then they wouldn’t have agreed to the deal.
The question now is just how big are those liabilities? We know at the very least they are $2,300,000. The release of “TransGlobe from any potential warranty and indemnity claims, which it may have had under the original sale and purchase agreement, and indemnifies TransGlobe in respect of any claims, which may arise from TransGlobe’s prior ownership of East Ghazalat.In return TransGlobe has agreed to forgo the outstanding $2.3 million balance on the Loan Note and any claims for accrued interest since completion of the acquisition in October 2015.”
Looking at it from TransGlobes perspective they are now totally out of the frame on liabilities that could come in at tens of millions of dollars! And liabilities there must be because common sense dictates that TransGlobe would not give up $2,300,000 in cash if there were none. A smart piece of business on their part and yet another act of desperation by the cash strapped Nostra Terra & it’s cash strapped partner IRG.
So here’s a few questions for Matt Lofgran. How big are the liabilities you’ve just indemnified Transglobe from? The liabilities start from $2,300,000 and as with all unknown liabilities in the oil and gas sector it most certainly is much higher than $2.3M! It could be in the tens of millions of dollars which is why TransGlobe agreed to todays deal . Let’s take a guess. Will you be booking in those liabilities on the next set of accounts? Answer NO. Another question; Egypt has a controlled currency. Why have you not informed the market that any cash coming from Egypt is paid in Egyptian pounds and cannot be converted into dollars unless the applicable State/Ministry authorise such?
Mired in debt, no production money, rotten business practices and a CEO who helps to short his own company. Stay well away from this POS.
A ticking time bomb.