Kalistani Major History

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KALNAPECO Board Formally Approves Lourenne Buy In
Board reserves 1,317,981,444 Shares for transfer, KPO Stock Prices rise on news
Sulari, Suldanor
October 5, 5347


Board of Directors offers Majority support for Lourenne Buy-In at Emergency Meeting

News of success of negotiations in Lourenne and interest in a Kalistan's terms for the much anticipated Lourennais buy in of KalNaPeCo sparked an immediate meeting of the Board of Directors of the Kalistani National Oil Company, who debated the messages from Kalistan's representatives to the United Kingdom. In a move that was broadly supported, KalNaPeCo purchased the remaining outstanding shares of the Company, totaling more than 1.3 Billion shares, for a total of nearly 38.7 Billion Rubles. The financing for the purchase came from a line of Credit from Republican Commerce Bank, a branch of the Republican National Bank, who will hold the shares in escrow pending sale to Lourennais Institutional Investors as part of the transfer. Upon buy-back of the outstanding stock, prices of KPO in the Kalsie skyrocketed, leading to a modest sell off in the afternoon following the announcement, before Prices settled down at around K36 a share.

"The reservation of the Stock was to guarantee a price to Lourennais Investors," said CFO William Brighton. "The Republic plans to offer the block of Stock to Lourenne for a price of 6.2 Billion Francs. This represents a significant discount from the K38.7 Billion that KPO paid to purchase the stock back. The deal comes with the block of stock, which is 38.2% of the longstnding National company." In addition, KPO intends to reorganize as an umbrella corporation, to transfer oil exploitation and refining operations, as well as the plastics operations, to KALENCON, who will come under KPO governance, and unite the Kalistani energy sector into a single corporation, while creating a new Corporation, incorporated in Lourenne, that will fall under KPO's board of directors and will be operated independently from Lourenne.

The Old KALNAPECO Chrater will be officially vacated and a new Charter will be drafted by the National Assembly following the sale, and will be ratified including Lourennais Directors to guarantee the Lourennais Company, ostensibly to be organized under Petrole Royale, to have independence in operations in all matters involving Lourennais drilling and refining of the Deep Sea Oil Formations along Kalistan's Southern Limit.

"We also will transfer the aging infrastructure in the Ananto Strait to the newly formed Lourennis firm, with KPO retaining access to those wells if needed" said Brighton. "The savings in not having to pay maintenance on those capped platforms will make up the remaining cost of the Stock in about ten years allowing KPO to settle the final part of its debt for the Stock Buyback." Meanwhile, KPO will raise the capital from Kalistani and Lourennais Investors to build a new refining facility in Lourenne to increase capacity in Dovani, and allow Lourenne to be able to refine its own oil in a modern facility. In addition, KPO has authorized an increase in production of Petroleum to up to as much as 250,000 barrels a day, up from Kalistan's current production levels of 57,000 barrels a day. KPO will be responsible, as before, for all environmental costs and will attempt to operate in the most environmentally conscious manner.

A profit sharing agreement will need to be hammered out still, though the Board has signaled that profits could be paid out either as an annual royalty to Kalistan, or in the form of dividends equal to the shares of the company, controlling for cost. "Obviously, the goal is that Lourenne earn a fair profit on its extraction and refining," said Brighton as he lobbied the Board. "However, we also want to make sure that 1) Oil is not being extracted at an unsustainable rate, and 2) Kalistan is making a fair amount that will allow us to keep our waterways clean and safe despite oil operations. There is enough oil in the Deep Sea formations to supply a conscientious user for centuries to come, and KALNAPECO has never operated for the goal of earning a lot of profit on oil sales. Ramping back up to old production numbers will obviously deplete those formations faster than we would like to see them depleted, but we feel that Lourenne is committed to keeping the seas and the air clean as well, and reducing pollution caused by fossil fuels, and it is our hope that when the Oil is gone, we will already have made the transition to clean energy through solar, wind, tidal, geothermal and fusion generation, so that fossil fuels are no longer necessary. We are certain that this is Lourenne's goal as well, rather than simply extraction for profit."

Following the role call vote, which came out 72-25 for the buy-in, CEO Marsha Zellig declared the effort a success. "We look forward to strengthening ties with Lourenne over this historic deal. It will be a benefit to both the people of Kalistan and the People of Lourenne, and will help Anantonese Nations break from dependence on foreign energy. We look for many years of cooperation with Lournne over this deal. We will forward this offer to Lourenne for approval, and barring any major changes, begin the merger."