Thu 16 Jun 2016 09:17

Brightoil to hold vote on oil purchase agreement


Company intends to buy oil and petrochemical products from its subsidiary in a deal worth $7.76 billion over the next three years.



In a notice issued on June 14th, 2016, Hong Kong-listed Brightoil Petroleum Ltd announced that a special general meeting will be taking place on July 4th, 2016 at the headquarters in Hong Kong. This meeting is taking place for all the board members and voting members of the company to give the final say on a series of deals that have been negotiated.

What is the Purpose of the Meeting?

Two main resolutions will be voted on by the members and proxies present at the meeting. These are the resolutions that will potentially become ordinary resolutions:

Agenda 1

Brightoil Petroleum Limited intends to buy fuel oil, diesel oil, crude oil, petrochemical, gas oil, and other unspecified petroleum products for the sum total of $7.76 billion over the next three years. These products will be purchased from Brightoil's subsidiary Shenzhen Brightoil Group in a deal known as the 2016 Oil Purchase Agreement.

This deal was finalized in May of 2016, but it won't be official until it is voted on at the upcoming special general meeting. If made into an ordinary resolution, the 2016 Oil Agreement will be payable between July 2016 and June 2019, in which case a new agreement may be negotiated.

2017 marks the largest purchase and payment year of the three, with fees payable up to $3.84 billion USD.

Also included in this agenda is the authorization for directors of Brightoil Petroleum Limited to act in a manner that will promote the completion of this deal. That includes anything that might be necessary for the company to do in order to make payments to Shenzhen Brightoil Group.

Agenda 2

Also to be noted at the special general meeting in July is the change in external auditors. Previously, Brightoil was audited by Deloitte Touche Tohmatsu, but will now be audited by PricewaterhouseCoopers. This will be in effect from July 2016 until June 2017 when the negotiated deal will expire and be voted on once more.

Brightoil is a physical bunker supplier in the Chinese ports of Qingdao, Shenzhen, Shanghai, Ningbo and Zhoushan. In the Maritime and Port Authority of Singapore's (MPA) ranking of suppliers by volume in 2015, Brightoil was ranked 23rd in a list of 59 suppliers in Singapore, up three places from 26th in 2014. The company also has a strong presence in Tanjung Pelepas and Hong Kong.

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