Clearance denied for divestment of JKX assets in Hungary

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JKX Oil and Gas on Thursday said Hungarian authorities have refused to clear the sale of its assets in Hungary, according to a report by state news wire MTI.

"Following pandemic-related delays JKX has now received notification that the relevant Hungarian authorities have refused the necessary consent to the transaction pursuant to legislation introduced as a result of the current COVID-19 pandemic. Consequently, the transaction will not proceed," the company said in a disclosure.

Under state-of-emergency powers vested by parliament, Hungary's government has been equipped with legal tools to prevent hostile takeovers in strategic sectors, such as the energy sector, during the pandemic. 

JKX announced early in 2018 that it intended to exit its oil and gas operations in Hungary, and it agreed on the terms for divesting its local subsidiary, Riverside Energy, in March 2020. At the time, JKX expected to get a consideration of about USD 2 million for the business with a working capital adjustment of USD 0.9 mln.

 On Thursday, JKX CEO Victor Gladun said the company would "continue to explore other options in relation to Riverside in line with our previously announced strategy of focusing our portfolio on our most prospective opportunities".

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