United Energy makes another bid for Transmeridian; new offer valued at $130 million

By Lisa Kerner

Charlotte, N.C., Nov. 24 - Transmeridian Exploration Inc. said it received a new, non-binding proposal from United Energy Group Ltd. to acquire all of the company's outstanding debt and equity securities for $130 million.

The companies mutually terminated their June 11 amended and restated investment agreement on Nov. 17 in order to explore non-exclusive alternative transactions, a Transmeridian news release said. The investment agreement was valued at $215 million.

In its latest proposal, United Energy offered to acquire Transmeridian's:

• 12% senior notes due 2010;

• 12% senior redeemable convertible preferred stock;

• 20% junior redeemable convertible preferred stock; and

• All of the outstanding shares of the company's common stock and other outstanding securities, including warrants and options that are convertible into common stock.

United Energy said it would provide funding for Transmeridian's working capital requirements prior to closing.

Transmeridian said that while it will consider United Energy's proposal, the company will also continue to actively solicit proposals from other qualified third parties for the sale, recapitalization or refinancing of the company.

Transmeridian, a Houston-based independent energy company, cautioned that if it fails to complete a satisfactory strategic transaction or secure adequate additional capital, it will be unable to meet its contractual obligations, including scheduled interest payments on the senior notes.

United Energy is an investment holding company based in Hong Kong.

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