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Does anyone know the protocol or legal route in taking a SPA through to completion ?
I'm just wondering that in light of what happened in Chad are we fooling ourselves in thinking that in order to prevent similar happening again we are expecting S.Sdn Govt approval along with the adm doc release ? I'm just thinking that it could be a case of the cart before the horse ?
If it was the case that Govt approval came first - but what happens if some (institutional) shareholders don't like it and it doesn't pass the GM Vote at all.
This in the belief that we are trying to tie in govt approval first and all that effort and time waiting to get that done first. What would the govt think that we as shareholders haven't voted on approving the matter first to see if the deal is even over the first hurdle - ie shareholders. I say this particularly with the situation in Sudan which came almost 4 months after the SPA was announced. How do the main shareholders feel about the risk level since then - are they all still fully behind this or instead could AK end up dealt a blow by the vote not being a majority - while we think rightly or wrongly all this time is being taken up trying to get Govt approval along with the release of the adm doc and restoration of trading. We've seen absolutely nothing of note in relation to figures ie even approximate capex, opex, reserves, production, FCF etc some 9 months later so how is an opinion to be informed if it is a good deal or not.
SAVE SPA for Exxon Chad 13/12/21.
Adm doc & Restoration 31/12/21.
GM Shareholders result to approve deal 24/1/22.
Consent deemed given with Completion 9/12/22
Afentra SPA with INA 19/7/22.
Adm doc & Restoration 10/8/22.
GM Shareholders result approving deal 30/8/23.
Recd Govt consent 12/1/23.
Completion 10/5/23
The INA SPA was a minor acquisition to the additional main Sonagol SPA signed in April 2022 and the later July 2023 Azule SPA making up 3 SPAs in total and currently suspended for the 2nd time.
On the remaining 2 SPAs' this is how Afentra set out the timeline to completion.
"The Company will now publish an updated Admission Document in due course, which will also convene a General Meeting at which the resolutions for shareholders to approve the Amended Sonangol Acquisition and the Azule Acquisition will be proposed - ***Subject to shareholder approval*** - the Company will proceed to obtain Governmental approval for both transactions with an expectation to complete both transactions in Q4 2023."
I could be absolutely wrong and to temper possible disappointment i am leaning for the expectation of a similar timeline as the above to how things progress - ie ad doc along with restoration of trading - then GM for shareholder vote - then expectation of Govt approval/deal completion.
Financial IR and company IR are very close to II’s and we have their full backing for the SS RTO deal fro Petronas.
Z - I find it very strange that you even pose that question. In the picture you paint, what do you think would happen to the SP if they voted “yes” and what do you think would happen to the SP if they voted “no”?
I can’t really see the II’s being akin to Turkeys voting for Christmas!
RR I've absolutely no doubt that Financial & Co IR are and would be expected to be very close to II's.
8 II's above 3% hold 53.87% and Cavendish that holds the EBT shares is another 5.26% plus the directors 4.79% is just shy of 64% in total and i've no doubt there are smaller II's below the 3% figure.
That's isn't my point about turkeys voting for Christmas but i'm just wondering how they feel about risk and if any of them decided to drop out or demand something for their support v risk since you ask. They know like us there are other deals being pursued so its not like S.Sdn to them is the only opportunity on the horizon.
That's why i posed the question about relying on or expecting govt approval and the adm doc at the same time.
Far from it being 'strange' to pose it - I never rule anything out especially after the fundraisings which came all the way down to 19.35p to get Chad through. They (II's) got more of the pie (inc AK) versus PIs and it's not PIs who call the shots. I'm hoping that everything will be fully debt financed this time around and obviously that all II's remain supportive.
My post was on the adm doc/Govt approval expectation happening in tandem.
There were two more SPAs signed in the last 3 weeks.
M&Prom/Assala in Gabon and a few days ago ENI/Oando in Nigeria with both subject to later govt approval - that's why i asked is there a set protocol or legal avenue that is followed in seeing a SPA through to completion rather than trying to get govt approval prior to a shareholder vote if that is the protocol/legal route ?
My view is that in a lot of these deals a preliminary binding approval can be granted subject to so other customary completions perhaps AK is looking for something similar before coming to the market. There isn’t a set structure as to when approval can be granted.
Zengas, some might - rightly or wrongly - perceive that post as subtly trying to minimize s/p damage in a scenario where Save comes out of suspension with South Sudan deal still absolutely wanting completing by AK but with government approval still pending on it
(and I'd be one of those some :-)... but see merit in the post still too.. for a variety of reasons)
PS: I'm absolutely for this staying suspended for longer again if South Sudan deal has not received government approval by the end of this month.. that is if there isn't another significant deal fully signed sealed and delivered instead /as well by the end of this month.. and my guess is there won't be another significant deal FULLY completed by the end of this month.
Whatever happens , happens so to speak NiceTMU when we eventually come out of suspension.
I'm just saying i don't want to get my hopes up on high expectation that we will see govt approval alongside the adm doc and take that as a negative if it doesn't arrive or if both are delayed come the end of the month for that matter. Great if it happens but i just think it might be a case of the cart before the horse just now - but who knows but it doesn't and won't change my perspective and I think TIL has hit the nail on the head with the 'Deals' post. I'm focussing on the longer term especially with other deals in the pipeline and Accugas continuing to evolve and the compression project to complete and the impact of more deals.
We've had a considerable number of new gas contracts (5) where we haven't seen the impact on a full year basis yet.
First gas sales to - TransAfam only started 28th June 2022. To Central Horizon only started 27th June 2022. To FIPL TransAmadi 22/6/22.
Likewise Notore Chemicals was only signed 16th August 2022 and connected so i assume may have started supply then.
That's 4 contracts that barely accounted for 6 months in the latest full year accounts to end 2022 released on 8th June this year.
In addition the Amocon contract didn't start until end of May this year.
There could be a significant amount of revenue playing catch-up to come through on a full year basis regardless of any new contracts in the pipeline and next years completion of the compression facility. All of this i would hope to have a material impact on reducing the net debt forecasts that much faster than anaylsts previously guided on prior to these additional contracts.
Whatever happens with deals, we have plenty to go fro in terms of accugas growth new contracts and higher volumes. always have said we if we can be strong and aggressive in executing on the accugas front than that alone could take us to being a £1bn market cap company in it's own right....................
Half year report to come end of September will be very interesting in my opinion and will provided further outlook as well
Regarding SP, the chairman's decision to subscribe at the suspended price of 26.25p is a compelling endorsement of the company's current valuation. This not only solidifies the market's optimism about our future plans but also lends extra credibility, especially considering the chairman's unique insight into the company's prospective growth.
Accugas increasing cash reserves and lowering net debt puts us in a robust financial position as we work towards finalizing another acquisition. Even if additional deals don't materialize, our focus will remain on strengthening accugas asset through additional gas contracts which in turn will strengthen financials by continuing to reduce net debt and accumulate cash that alone will provide upside headway to the company
Regarding SP, the chairman's decision to subscribe at the suspended price of 26.25p is a compelling endorsement of the company's current valuation. This not only solidifies the market's optimism about our future plans but also lends extra credibility, especially considering the chairman's unique insight into the company's prospective growth.
Our strategy of increasing cash reserves and lowering net debt puts us in a robust financial position as we work towards finalizing another acquisition. Even if additional deals don't materialize, our focus will remain on strengthening our financials by continuing to reduce net debt and accumulate cash.
NicetoMichu - I believe everyone on here would prefer to be suspended and wouldn't mind a few additional months suspension if that were the case. We have waited this long what's a few additional months. Everyone is assuming that this deal is solely dependent on South Sudan Goverment approval but the list of approvals is far greater for this deal and Savannah has not explicitly stated the wait is because of the government approval it is something that investors are inherently jumping too..... they have always referred to workstreams which is a lot more broader.
UK Approvals
1) UK Government
2) UK Listing Authority
3) FCA
4) Competition and Markets Authority
5) Savannah Shareholders
South Sudan Approval
1) South Sudan government approval
2) South Sudanese National Petroleum Commission
3) Nilepet approval
4) Minister of petroleum approval
5) Minister of finance approval
Potential US government approval ?
1) We may need US government approval as South Sudan my be subject to international sanctions
Approvals from other partners like CNPC and ONGC the PSC
The list could be exhaustive and who knows whether we need all of the above or some and some may come together.
So you can imagine with so many approvals and stakeholders to please timelines can always and likely shift.
Of course Savannah Energy may need all of the approvals to feel comfortable to come to market but I would imagine they would have got legal advice on what is utmost importance which will make the deal as watertight as possible and one which can not be back tracked on once we commence trading.
So I am confident that when Save do release the admission document even if it doesn't have all formals approvals in place there would be measures taken in the background which we may not be immediately privy to especially after lessons learnt from Chad deal to ensure that the risk is minimal as possible post release of admission document and re-listing. ...
A great example of risk mitigation is we know the clauses on the Exxon debt facility was amended post chad nationalization something that wasn't explicitly stated but was part of the annual report. So we know Savannah are pretty good at taking measures to protect inherent risks.
Hence I think many who have spoke to IR and Nominated advisor have mention that AK is looking to come to market only when there is some assurity so if the company does release the admission document and re-admits without formal approval i would be certain that background assurances would be granted which we may not be privy to until formal approval news lands