Maha Energy AB is pleased to announce that it has completed the sale of its Brazilian subsidiary Maha Energy Brasil Ltda.  to PetroRecôncavo S.A. after fulfilling all precedent conditions. The acquisition consideration amounts up to USD 174.1 million plus USD 9.3 million in adjustment of net working capital and USD 3.7 million of net cash adjustment from Maha Brazil, resulting in a total acquisition consideration of up to USD 186.9 million.

The signing of the sale of Maha Brazil to PetroRecôncavo was announced on December 28^th, 2022. After proper adjustments made at the closing date and considering possible earn-outs contractually agreed, the total acquisition consideration can reach USD 186.9 million, being comprised of the following:

1. the adjusted purchase price, equivalent to USD 138.0 million, with additional adjustment of net working capital of USD 9.3 million and net cash of USD 3.7 million, in a total amount of adjusted purchase price of USD 150,9 million to be paid in two installments: (a) USD 95.9 million, at the present date -- i.e., February 28^th, 2023 (the closing date), and (b) USD 55.0 million, 6 (six) months after the closing date – i.e., at August 28^th, 2023;
2. additional earn-outs of up to USD 36.1 million, which could be paid based on certain contractual conditions being met, whereof up to USD 24.1 million refers to the average annual Brent oil price for the next three years. It will start to be payable from USD 80 per barrel with a maximum to be reached if the price is above USD 90 per barrel. The remaining payment will be subject to  synergies with Petoreconcavo’s potential new assets. Part of proceeds from the transaction will be used as collateral for Maha’s outstanding debt to BTG Pactual (related to the Credit Agreement dated 30^th  March 2021).

“This divestment is a significant step within the Company’s new strategic positioning, continuously focusing on generating value for shareholders. As a result of this sale, we will have a strong balance sheet and cash position, enabling the Company to pursue further opportunities in the O&G market. In addition, we have already announced a business combination with DBO, which will, at closing¹, add a current net production of approximately 2,000 BOEPD and 18.5 million BOE of 2P reserves (according to the public information regarding the Certificate of Reserves),” says Paulo Thiago Mendonça, CEO of Maha Energy AB.