Think you need to look at the AGM presentation, which was updated to reflect the actual deal done in the end. This is dated September and makes clear that the deal is financed by the equity placing and that repayment of the loan notes thus becomes the key initial revenue stream to SLE. Others have commented below on the logic behind this fairly sophisticated structured financing, preserving the advantageous terms of the negotiated sweep revenue from OML18. See slide 4 of the presentation. http://www.sanleonenergy.com/investors/shareholder-information/annual-general-meeting.aspx
That's what sle say so they must know a lot more than you, but I must admit I would think that all the work overs etc mentioned in the lnterims will increase production further adding more to the even swelled accruing bank account of eroton!!
Sid like callous junkie, brotherseven deadcat all seem to read the risk assessment page!! But hold nothing here just a really bad smell of rotten eggs.
From admin doc.
With a vote of approval by SLE shareholders at the September 2016 EGM and completion of the proposed placing, San Leon will be able complete the acquisition of its 9.72% indirect economic interest, and benefit from the revenues generated to date by the asset
By a guarantee dated 22 March 2016, Midwestern and Mart jointly and severally guaranteed to the Initial Noteholders the payment of the Loan Notes by BidCo.
Interest is paid quarterly at the rate of 17 per cent. per annum. Interest will be paid from a minimum of 65 per cent. of BidCo cashflows, with the percentage increasing up to 100 per cent. if required to service the principal and interest payments on the Loan Notes
The corporate guarantee with Midwestern envisages and provides protection for this and ensures repayment of the loan note within four years. San Leon management are highly confident that sufficient safeguards are in place, including cash flows from the 25mbopd Umusadege field and pipeline tariff, and if necessary payment in equity
In April 2016, production levels at OML 18 were approximately twice that originally forecast when the hedge and RBL were put in place and as such it is expected that Eroton will meet the covenants and repayment profile of the RBL. At a meeting of the lenders of the RBL, it was agreed that 60 per cent. of available funds after payment of interest and repayments can, subject to certain conditions, be distributed as dividends to Eroton’s shareholders. Such conditions are expected to be satisfied by the end of Q1 2017.
The Company will make any distributions, subject to compliance with the requirements under the Irish Companies Act 2014, including the level of distributable reserves. The Company will make distributions on a bi-annual basis taking into account this policy as outlined above. The Company anticipates that its maiden dividend will be announced in its final results for the year ended 31 December 2016.
Seems to me, us private investors are going to get any leftovers after Tosca and others higher up the pecking order have their slice.
Reserve based lending (RBL) refers to an asset based financing technique that is unique to the oil and gas sector. It is secured lending where the collateral is the revenue stream that the borrower has from oil exploitation contracts.
So does anyone know how much needs to be paid back before we get a sniff?
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