Information from Interim report January-September 2021 Misen Energy AB (publ)
Following is a summary of the financial information given Interim report January - December 2021 (9M 2021) from Misen Energy AB (publ) published today. The complete report is attached and is available in both English and Swedish on the Company's website: http://misenenergy.se/repository/Financial_reports_ENG/Misen_Energy_Q3_2021_ENG.pdf
Results for January-September 2021 (within brackets same period 2020):
- Consolidated operating group result KSEK KSEK -28,229 (10,179)
- Consolidated group net turnover: KSEK 33,496 (24,020)
- Earnings per share: SEK -0.20 (0.06)
- Production of natural gas: at zero level (at zero level)
Results for July-September 2021 (within brackets same period 2020):
- Consolidated operating group result KSEK -3,452 (-570)
- Consolidated group net turnover: KSEK 4,621 (4,523)
- Earnings per share: SEK 0.04 (0.01)
- Production of natural gas: at zero level (at zero level)
Summary of results:
- Given that the Arbitral Tribunal rendered an award to terminate the Joint Activity Agreement No.3 (the “JAA”), Misen Energy AB (publ) believes that control over the specific assets owned by the Joint Activity (the “JA”) no longer exists. Thus, Misen Energy AB (publ) continues accounting treatment of 50.01% participation interest in the JA under which assets and liabilities are not presented in the financial statements.
Key events during 9М 2021:
- In November 2020, Misen Enterprises AB and LLC Karpatygaz received a Final Award by Consent from the Arbitral Tribunal in the SCC Arbitration. On 5 January 2021 the Kiev Court of Appeal recognized Final Award by Consent dated 5 November 2020. On 10 February 2021, Misen Enterprises received USD 47,060,537.16 (KSEK 399,243 ) and LLC Karpatygaz received UAH 1,001,242.74 (KSEK 307) from JSC Ukrgasvydobuvannya. This compensation is after taxes applicable to Misen Enterprises AB in Ukraine. JSC Ukrgasvydobuvannya was entitled to withhold a tax on non-resident income for 15% of the compensation to Misen Enterprises AB (UAH 236,113,788, KSEK 72,310) and pay the withheld amount to the budget of Ukraine.
- On 14 January 2021 the Supreme Court of Ukraine issued a ruling recognizing the Second Partial Final Award dated 12 June 2020 (subject to the Corrections of the Second Partial Final Award dated 18 August 2020). Accordingly, JSC Ukrgasvydobuvannya transferred EUR 2,739,784.53 (KSEK 27,801), SEK 344,415.38, USD 7,971.59 (KSEK 68), and GBP 10,940.05 (KSEK 123) to Misen Enterprises AB for the legal costs incurred the SCC Arbitration.
- Following successful resolution of the SCC arbitration and given that Misen Enterprises AB received compensation from JSC Ukrgasvydobuvannya, Misen Energy AB (publ) and Misen Enterprises AB executed payments to the funders under the financing agreements. Namely, under the Financing Agreement concluded in March 2020 the companies EUR 1,940,000.00 (SEK 19,685,378); under the Financing Agreement concluded in November 2018 the companies paid EUR 8,452,140.90 (SEK 85,764,736) and EUR 3,221,404.00 (SEK 32,687,915).
- On 13 September 2021, Misen Energy AB (publ) closed the purchase of 47.5% of shares and share capital in Misen Enterprises AB with PUL. The shares’ purchase price was SEK 2,724,817 plus 47.5% of the distributable income from the compensation, if any, to be received following the completion of the investment arbitration against Ukraine in ICSID Case No. ARB/21/15 (“BIT arbitration”). Under the agreement, Misen Energy AB (publ) and PUL undertook to share the costs of the funding, if any, to finance the BIT arbitration
- On 24 March 2021, Misen Energy AB (publ) and its partially owned subsidiary Misen Enterprises AB filed a Request for Arbitration under the Washington Convention and the Rules of the International Centre for Settlement of Investment Disputes (ICSID) against Ukraine. ICSID is an international organization that is part of the World Bank Group, headquartered in Washington, D.C., in the United States. The claims against Ukraine relate to Ukraine’s breaches of the companies’ rights – and the ensuing damage to the companies’ investment in Ukraine – resulting from the imposition of a 70% subsoil use charge for the production of natural gas from depths of up to 5,000 meters.
- On 30 June 2021 the tribunal was constituted in ICSID arbitration against Ukraine. Professor Jan Paulsson has been appointed as president of the Arbitral Tribunal in a dispute between Misen Energy AB (publ) and Misen Enterprises AB vs. Ukraine (ICSID Case No. ARB/21/15). Earlier the Swedish companies appointed Dr. Stanimir Alexandrov and Ukraine - Professor W. Michael Reisman.
- In January 2020, the hearing was held in the court proceeding in Case initiated by the National Anticorruption Bureau of Ukraine (“NABU”) based on the criminal complaint submitted by JSC Ukrgasvydobuvannya in 2017. On 5 June 2019, the Constitutional Court of Ukraine decided that NABU has no authority to challenge validity of any such agreements. Disregarding the above decision of the Constitutional Court of Ukraine, as well as the awards dismissing any allegations concerning illegality of the JAA No.3 rendered in the SCC Arbitration, NABU and JSC Ukrgasvydobuvannya continue legal proceedings in Ukraine.
Key events after end of 9М 2021:
- On 1 October 2021, Misen Energy AB (publ) closed the purchase of 2% of shares and share capital in Misen Enterprises AB with Mr. Konstantin Guenevski, Bulgarian citizen, who is a senior trader of one of the world’s leading independent commodity trading and logistics houses. The shares’ purchase price was SEK 114,729.00 plus 2% of the distributable income from the compensation, if any, to be received following the completion of the BIT arbitration against Ukraine. Under the agreement, Misen Energy AB (publ) and Mr. Konstantin Guenevski undertook to share the costs of the funding, if any, to finance the BIT arbitration.
- On 29 October 2021, Misen Energy AB (publ) and Misen Enterprises AB submitted a Memorial in international investment arbitration case against Ukraine (ICSID Case No. ARB/21/15). Misen requested for compensation that reflects the going concern value of Misen’s share at the time exorbitant subsoil use tax was imposed on Joint Activity, which led to the termination of the JAA No.3.
Publication of the Interim report January - September 2021
Future reports and events
The interim January-December 2021 report will be published 25 February 2021.
For further information, please contact:
Göran Wolff, MD
The company was founded in 2004 and its shares have been traded on Nasdaq First North Growth Market since June 2007. In 2011, Misen Energy AB (publ) acquired Misen Enterprises AB and its Ukrainian subsidiary, LLC Karpatygaz, including the rights to 50.01% of the revenue and profit from a gas production project in Ukraine. Misen Energy AB (publ) acquired the rights to produce hydrocarbons under Joint Activity Agreement No.3 (“JAA No.3“) between Misen Enterprises AB and LLC Karpatygaz (together 50.01%) and JSC Ukrgasvydobuvannya (49.99%), a subsidiary of the NJSC Naftogaz of Ukraine. The purpose of the JAA No.3 was to significantly increase production of hydrocarbons by providing modern technologies via a large-scale investment program for the purposes of attainment of profits.
The JAA No.3 (as amended and restated) was terminated in June 2018. As a result, Misen Energy AB (publ) received compensation that reflected its share of the replacement costs of the equipment subject to the joint ownership under the JAA No.3. In March 2021, Misen Energy AB (publ) and Misen Enterprises AB initiated an investment arbitration against Ukraine (ICSID Case No. ARB/21/15) concerning Ukraine‘s breaches of the investor‘s rights resulting from the imposition of a 70% subsoil use charge.
In March 2018, Misen Energy AB (publ) sold 2% of Misen Enterprises AB‘s shares to Mr. Konstantin Guenevski. In September 2021, Misen Energy AB (publ) purchased 47.5% Misen Enterprises AB‘s shares from the Hong Kong based company Powerful United Limited and 2% from Mr. Konstantin Guenevski. Owning 100% of Misen Enterprises AB‘s shares, Misen Energy AB (publ) maintains full control of Misen Enterprises AB.
The registered office of Misen Energy AB (publ) is in Stockholm. Misen Energy AB (publ) is listed on Nasdaq First North Growth Market and the Company adheres to the rules and regulations for First North. The Certified Adviser of the Company is Erik Penser Bank AB, tel.: +46 8 463 80 00, email: email@example.com.
For further information, please visit our website www.misenenergy.se.
This information is information that Misen Energy AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 10:00 CEST on 30 November 2021.