EMGS: Signed agreement for asset sale transaction
Reference is made to the stock exchange announcement published by Electromagnetic Geoservices ASA (the "Company" or "EMGS") on 9 March 2026 regarding a non-binding term sheet for a transaction (the "Transaction") under which an undisclosed, independent third-party would acquire EMGS' business operations and assets, including hardware, IPR, contractual positions and all of the Company's employees (together, the "EM Business").
EMGS has now entered into a binding transaction agreement (the "Agreement") with the buyer, P-2 Riggs Capital, Inc. ("Riggs Capital" or the "Buyer").
Riggs Capital is a private investment holding company and corporate finance advisory firm, specialising in selective investments and advisory services (). Riggs Capital is owned by Patrick L. Riggs.
Under the Transaction, Riggs Capital will acquire the EM Business after it has been transferred to one of EMGS' existing subsidiaries ("NewCo"). All historic liabilities, including the convertible bond issue Elec ASA 18/25 FRN USD FLOOR STEP C CONV (“EMGS03”), will be retained by EMGS and not transferred to NewCo.
The consideration to EMGS under the Transaction is up to USD 2.5 million, whereof USD 1 million is paid on closing and USD 1.5 million is a conditional earn-out subject to certain future conditions being met. Additionally, through the Transaction certain future liabilities which would otherwise accrue to EMGS will be taken over by NewCo and will consequently reduce EMGS' total liabilities post-closing of the Transaction.
The majority of the USD 1 million consideration to be paid to EMGS on closing of the Transaction will be used to settle certain pre-existing obligations related to the transferred employee group (accrued and unpaid holiday pay, pension, payroll tax etc.) in accordance with the terms of the Agreement.
As part of the Transaction, NewCo will take over all rights to the name Electromagnetic Geoservices and EMGS. Consequently, the Company will in due course change its own name in accordance with the Agreement.
As stated in the stock exchange announcement published on 9 March 2026, the Transaction represents, in EMGS' view and based on the strategic review conducted over several months, the best available alternative to safeguard the interests of the Company's stakeholders, including employees, customers and creditors. The alternative to the Transaction would be an orderly wind-down of the Company's operations. Through the Transaction, the Company will receive a limited consideration and reduce certain of its total liabilities, which the board considers more beneficial for the Company's stakeholders compared to an orderly wind-down scenario.
Closing of the Transaction is subject to obtaining the necessary consents and waivers from the bondholders of EMGS03 and the support of the Company's two largest shareholders who, in aggregate, own approx. 63 per cent of the total shares and votes of the Company. Given the time-critical nature of the Transaction, the need to ensure continuity of the EM Business operations to limit the Company's liability exposure and the Company's financial situation, it is not expected that the Transaction will be subject to a shareholder vote.
Following completion of the Transaction, EMGS will no longer own and operate the EM Business, and hold no material assets other than a limited cash position which does not exceed
its total liabilities. The board of directors intends to initiate a follow-on strategic process post-closing to evaluate the future strategy of the Company and structure following completion and will revert with an update once the board has concluded on its recommendation in this respect.
Contact
Anders Eimstad, Chief Financial Officer,
This information is published in accordance with the Norwegian Securities Trading Act § 5-12.
About EMGS (prior to completion of the Transaction)
EMGS, the marine EM market leader, uses its proprietary electromagnetic (EM) technology to support oil and gas companies in their search for offshore hydrocarbons. EMGS supports each stage in the workflow, from survey design and data acquisition to processing and interpretation. The Company's services enable the integration of EM data with seismic and other geophysical and geological information to give explorationists a clearer and more complete understanding of the subsurface. This improves exploration efficiency and reduces risks and the finding costs per barrel. CSEM technology can also be used to detect the presence of marine mineral deposits (primarily Seabed Massive Sulphides) and in other offshore construction and exploration activity.
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