Verenex, Libya aiming to meet deal deadline: sources

By Alex Lawler

LONDON (Reuters) - Verenex Energy Inc. and Libya expect to finalize a deal by Friday to sell the company to a Libyan sovereign wealth fund, but a further delay is not ruled out, sources familiar with the matter said on Wednesday.

The Libyan Investment Authority (LIA) has agreed to pay C$7.09 a share for Verenex, a Canadian oil firm with assets in Libya, in a deal valued at around C$316 million. Verenex said in an October 20 statement the parties have until November 6 to sign a definitive agreement.

A source with knowledge of the talks said the parties were hoping to finalize the deal by Friday, but did not rule out the prospect of the date to reach the final agreement being extended for a second time.

"We're still targeting getting everything done by the 6th," said the source, who declined to be identified because the talks are confidential. "That's the target."

"We are still in negotiations, but I hope we will finalize everything," said a second source.

The Verenex saga highlights the risks for Western investors in Libya, holder of Africa's largest oil reserves. The government blocked a deal by China, which offered to buy Verenex for C$10 a share in February. The Libyan Investment Authority later agreed to buy the firm for the lower price.

Some investors in Verenex, while believing the remaining matters under discussion are not material to the terms of the deal, were sceptical it would be tied up by Friday.

"To extend this for another few weeks would be par for the course," said one shareholder. "What's another few weeks when this thing has been dragging on for months?"