EMGS sells core geoservices business in $2.5 million deal to Riggs Capital
(WO) — Electromagnetic Geoservices (EMGS) has agreed to sell its core geoservices business to Riggs Capital in a transaction valued at up to $2.5 million, marking a major shift for the offshore exploration technology company.
The deal follows a previously announced term sheet and will transfer the company’s operating business—including assets, intellectual property, contracts and employees—into a subsidiary that will be acquired by Riggs Capital.
Under the agreement, EMGS will receive $1 million at closing, with an additional $1.5 million tied to future performance conditions. The buyer will also assume certain future liabilities, helping reduce EMGS’ overall financial obligations.
Historic liabilities, including the company’s convertible bond debt, will remain with EMGS and will not be transferred as part of the transaction.
The company said most of the upfront payment will be used to settle employee-related obligations, including accrued holiday pay, pensions and payroll taxes.
As part of the transaction, the operating business will retain the Electromagnetic Geoservices and EMGS name, while the remaining company will be required to rebrand following completion.
The agreement is subject to approvals from bondholders and support from the company’s two largest shareholders, which together control approximately 63% of shares and voting rights.
The company said the transaction follows a strategic review and represents the preferred alternative to shutting down operations.
“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.”
Following closing, EMGS will no longer operate its core business and will retain only a limited cash position relative to its liabilities. The board said it will evaluate next steps for the company’s future structure after the transaction is completed.
