OANDO PLC: "Half a step" Closer to COP Acquisition ConocoPhillip
The Alausa IPP marks another milestone in the relationship between Oando and the Lagos State Government.
- Abilene, TX (1888PressRelease) November 19, 2013 - OANDO's subsidiary, Oando Energy Resources (OER) announced that it has received signed Commitment Letters from international and local banks for up to US$815 million of term financing towards the acquisition of ConocoPhillip (COP)'s Nigeria upstream businesses.
The Credit Facilities
A US$465 million RBL facility: This facility is internationally placed and led by BNP Paribas, Standard Bank and Standard Chartered Bank. Whilst no pricing detail was communicated in the release, we expect that the facility would command a rate of around LIBOR+8% as earlier guided by management. Reserve Based Lending (RBL), is a commonly used technique in the oil & gas industry for financing assets which are already in production or where production is expected to commence shortly. In this case, the lending is against the assets of the target acquisition, COP Nigeria.
US$350 million Senior Secured Loan: Thisloan is locally arranged by FBN Capital and FCMB Capital Markets. We expect the loan will be secured against OER's existing production. We think pricing would be around LIBOR+9% as earlier guided by management.
With these facilities, OANDO is much closer to closing the deal
Having made an initial US$435 million deposit, raised US$200 million via Rights Issue in Q1'13 (45% of proceeds will finance this acquisition), in the middle of equity issuances in the Nigerian and Canadian markets - OANDO Special placement and OER IPO respectively, the bank facilities, upon closing, will provide the debt funding required to complete the acquisition. Recall that management targets a 50-50 debt/equity financing for the acquisition.
We note that on September 16, OER advised of an extension in the outside date for completing the transaction from September 21 to November 30; reason being the termination of the agreement to purchase Phillips Brass Limited (COP's vehicle in Brass LNG) with same now to be acquired by parent OANDO - OER would like to remain fully operational as an upstream oil & gas business whilst Phillips Brass fits well into the integrated model of OANDO. As a result of this, the balance acquisition price of COP Nigeria comes to US$1.22 billion (after the termination of the agreement to purchase Phillips Brass, adjustments as of the date hereof and the deposit already paid to COP). With the bank facilities accounting for 65% of the balance acquisition price, and considering the US$150 million or 45% of Rights Issue proceeds, the financing gap will be c.US$250 million which OANDO expects to raise from the ongoing Special placement or proceeds from first tranche of OER IPO issue - US$550 million shelf registration made - on the Canadian Stock Exchange (TSX).
Company Profile Details:
Company Name : Intelligent interactive limited
URL : http://www.intelligentinteractiveltd.com/
Address : No 21 wale adenekan,Magodo Gra lagos
Company E-mail : temi ( @ ) intelligentinteractiveltd dot com
Contact Person Name : Ikpehare sobowale
###
space
space
Satisfied Users & 
Approved Press Releases
Print
Email
Report Spam