Nigeria-focused Mart Resources Inc. (MMT) was unchanged at 19.5 cents on 925,200 shares, after announcing that it will give its suitor more time to meet its takeover financing deadline. Mart's investors are familiar with this kind of announcement. It has been almost exactly a year since Mart put itself up for sale. At the time, the stock had fallen to around 70 cents from its mid-2014 high of $1.80 as a result of low oil prices, heavy debt, and some disconcerting behaviour from its then chairman and CEO, Wade Cherwayko. He left last summer after an internal investigation revealed that he had violated the company's insider trading policy and code of conduct. (He was busy anyway with his increasingly nasty divorce. After he repeatedly ignored a London court's order to pay his ex-wife five million pounds, and then repeatedly failed to show up to hearings, he was sentenced in August to 21 months in jail.) Meanwhile, one of Mart's joint venturers in Nigeria, Midwestern Oil, came forward with an 80-cent-a-share takeover offer in mid-March, shortly after Mart went up for sale. Investors were skeptical that Midwestern could afford to pay 80 cents a share and take on Mart's $200-million (U.S.) debt. Midwestern insisted that it could, and agreed to a financing deadline of June 15, 2015. This was later extended to July 26. Then Aug. 19. On Aug. 18, Mart said it was clear that Midwestern would not complete the financing, and the deal was officially cancelled on Aug. 27. Weeks later, in mid-October, Mart agreed to a different takeover, this time at just 35 cents a share, from the Saudi Arabia-based Delta Group. It was the same story: Investors were skeptical, Delta had to be given a financing extension, and ultimately the deal collapsed in mid-December.
Mart finally found a somewhat more credible lifeline about a month ago, when Midwestern turned up again but brought a new face along with it: San Leon Energy, an AIM-listed Irish company with operations in Europe and North Africa. Under the terms of the deal, San Leon will get an interest in a large Nigerian oil field if it completes a financing and then gives the money to Midwestern, so that Midwestern can buy Mart for 25 cents a share. This struck investors as faintly plausible. The stock doubled to 17 cents from 8.5 cents on Jan. 22 and has hovered around there ever since -- still below the 25-cent offer price, but a better record than the other offers. San Leon said it would raise the money by Feb. 17, which was yesterday. Today, Mart announced that San Leon needs an extension. It strove to soften the blow by pointing out that San Leon is "well advanced" in closing the financing, so the extension period will not be very long. The new deadline is Feb. 24.
However rough a roller coaster Mart's investors have been on, they are still in better shape than those ofArgent Energy Trust (AET: halted at $0.005), which finally gave in and filed for bankruptcy yesterday. Its filing comes about 2-1/2 months after the bankruptcy filings of the similar Parallel Energy Trust. Both Argent and Parallel, along with the third member of their trio, Eagle Energy Trust, started going public around late 2010 to take advantage of tax loopholes for Canadian trusts with U.S. production. They all did their initial public offerings at $10. Unfortunately, their particular breed of income trust model never took off in popularity, and managing their U.S.-only assets, generous distributions and increasing debt loads proved harder than expected. Eagle managed to escape (though not unscathed) by selling some of its U 374603.S. assets, buying some Canadian assets and ultimately converting into a corporation earlier this month. It is now called Eagle Energy Inc. (EGL: $0.67). Parallel and Argent, on the other hand, were too far gone. Parallel, with $158-million (U.S.) in bank debt and $63-million in debentures, filed for bankruptcy in November and received court approval last month to sell its assets for $110-million (U.S.). Now Argent is following suit. It owes a little over $50-million (U.S.) in bank debt and around $150-million in debentures. CEO Sean Bovington told the Calgary Herald that the idea of any money being recovered for shareholders is "not promising" (no kidding). He said Argent will be accepting bids on its assets until March 17.