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Elections next year and President might not get in and perhaps wants a nice little pension of say $1.8b courtesy of some F--kwit that will lend it to them and to the expense of the South Sudanese people when the actually can't pay it back.
Roll on friday and hopefully some clarity.
The new finance minister was appointed early August - is that the Presidents doing just before these Caltech discussions kicked off ?
I think the President himself has business interests or connections.
New finance minister said in that interview they have been discussing this with Caltech since about 22nd August - that's late in the day.
He said they had a 3 minute meeting in New York - seems quite, quite ridiculous not withstanding they want $3b including $1.25b to buy Petronas assets.
First 5 years as repayment holiday on a term of 13 years at an interest rate of 1.5% - never mind inflation.
Risk would be incredible on future oil prices never mind a future government and risk of not being able to repay with the economy predominantly dependent on oil, landlocked (for now) and a war raging on your only export route.
Seems somewhat very underwhelming for a US firm that their website is pretty poor.
Has the govt not approached oil traders who are fairly awash with bumper cash this past few years ?
I could be very wrong but i don't think they have said NO or YES to SAVE but trying to find a better deal that gives them more interest if they could get the money and maybe up against a deadline. The govt seems pretty broke.
One thing which i think is important - we DON'T KNOW know how the oil contracts, clauses etc are structured - sellers rights etc?
Perhaps the govt knows that SAVE/Petronas can complete on whatever laws/rights are in force and if the govt doesn't have that cash by a specified date then maybe a deal can be close depending on what the original contracts are ???
Either way, i would expect a mention in the next few days.
Lol, as you say porthmeor.
Komakino,
You were wrong about me holding shares and you are wrong once again to suggest hindsight.
Not lazy at all. it's a valid question. You had a year from the admission document for Chad to the point shares were suspended. More than enough time if you felt that it was mad to try and do a deal with them. Obviously you didn't then and are just acting with hindsight.
Komakino,
Lazy argument suggesting / doubting my share ownership just because I have a different view to you. Yawn
For info I've held since before the 7E deal
I read your suggestions, however this isn't the deal SAVE have been working on for the last year. If the Government were interested in these alternatives they've had a year to be up front with SAVE and have that discussion, rather than scrabble around for funding themselves behind the scenes.
As for selling my shares since the Chad acquisition, you have seen how long the shares have been suspended have you.
Porthemeor - the video is nothing new whether they approve save or not is another story but they ain’t getting hands on that kind of money from anyone.
1) we could acquire the assets in the short term for 5-7 years and than transition it over to state.
2) we could give a much sweeter deal on the production sharing fronts.
This whole caltech saga has been designed to perhaps re-negotiate terms that suit them favourably. They may reject savannah eventually remains to be seen but the government has not publicly stated that they have rejected savannah yet. Some articles have implied it based on this caltech deal.
Since the deal was announced not a single person in government has said a word mentioning savannah that could be a good or a bad thing depending on how you see it. If Savannah was totally out of the picture than I would have expected minister to say we have formally rejected savannah as a partner so there are clearly hedging their bets as well.
Besides as far as I could tell from Rockys update on this Petronas we’re as surprised on Monday. So the new buyer would have to negotiate with Petronas as well and that takes months if not longer.
There are 2 options in this really Petronas keep the assets for the foreseeable future or they approve savannah.
In terms of costs once all the due diligence has been done and all the other work streams are complete you wouldn’t have additional costs if the government approval is the only bit outstanding so at this point.
Obviously with every deal there comes a point between a buyer, seller and the approver to make a firm choice and set a non negotiable deadline to either continue pursuing or to move on. Whether we have reached that stage for this deal remains to be seen.
SS government are just putting feelers out there in the market by naming their price for the asset as $3bn in a nutshell to see if anyone bites, but if I was a betting man and if someone was to give them a $1.25bn loan to purchase and intergrate the asset into nilepet I don’t think they would bite. They are not interested in running the asset at this stage they are more interested in the additional $1.8bn lump sum top up.
If they were just interested in purchasing the asset they would just give with give us $1.25bn
Zone, of course I got it, and I’m not having a dig. I wouldn’t to anyone never mind you :) I’m just saying as the topic came up. I certainly don’t think he should have any bonus or even a raise. I like him and think he’s super clever but ultimately he needs to take full responsibility.
Porthmeor, assuming you are actually invested, you had more than enough notice that AK was hunting aquisitions in West Africa, and more than enough time to sell up if you didn't like the feel of the Chad aquisition, almost a full year in fact.
Obviously SS Govt don't want us to have the assets but not sure where SS Govt will get the cash from , Caltec don't have a pot to p--s in and surely the only possible Loan outlets would be world bank or IMF and they won't lend just so they can purchase these type of assets, which would leave the possibility of nations or mercenary groups to offer up the funds in return for assets and concessions in country (just a thought ) with brown envelopes a plenty.
Tier, my post was tongue in cheek ie if AK was getting $2.5m in performance bonus then that would infer good news for shareholders.
Trouble with AK is he thinks he's CEO of an ExxonMobil or BP whereas SAVE have very little clout.
He's also got us involved in 2 of the worst African countries to do business in to boost his ego. Any CEO can find value enhancing projects in these countries, they're cheap for a reason, because they're are a nightmare to do business in and few are mad enough to try.
I think most of us feel this deal will not be approved.The government has no intention to let us buy these assets. I did think all wasn’t well came the June deadline when it still wasn’t done. I’m just sad. Talking about AK’s bonus, really? Share price performance based? I respect him but ultimately he is the ceo making all the decisions and got paid handsomely for the task. I just don’t know what to think. Good luck all, my virtual friends/holders.
Yes, just what we need years of legal wrangling and costs like Chad ! Wonderful
Porthmeor
If the deal does proceed and the SS wish to take it in to state control in the future, then they would be required to follow International conventions to do so.
T - if this is to fail post another 1 - 3 months or so, at least we can work up other options in the background and get them as oven ready as possible. Additionally, on the assumption that Accugas is performing exceptionally well, the debt number will hopefully be reduced significantly further. Downside would be if this is to fail is that the longer it goes on, the more good money we are throwing at it in transaction costs.
As with many on here, I’ve had enough of this now and am extremely hungry for as much information from the company as possible and as soon as possible - but pretty much 100% now that we will get what we are to be told at 7.00am on Friday.
I really am not looking forward to our relist price. What’s the point of another extension when the government has no intention of granting approval. I really don’t feel happy right now.
Https://www.facebook.com/watch/?v=1374599343128219
Watch from 7 minutes in.
So the SAVE deal with Petronas is dead in the water according to the facebook video of Dr Chol, minister of finance and planning.
He's admitted the Government wants CalTech to lend the Government money to buy the Petronas Oil interests in the country, so they obviously do not want SAVE to have it.
Even if CalTech can't raise the money, how can SAVE possibly progress now knowing that at any point in the future the Government could claim the oil interest back into state control as and when they feel like it, should they get financial backing, just like Chad have done. How can we possible proceed with a massive purchase like this in a despot country like this.
IT'S OVER ! and AK needs to RNS now !
Https://www.facebook.com/watch/?v=1374599343128219
So the SAVE deal with Petronas is dead in the water according to the facebook video of Dr Chol, minister of finance and planning.
He's admitted the Government wants CalTech to lend the Government money to buy the Petronas Oil interests in the country, so they obviously do not want SAVE to have it.
Even if CalTech can't raise the money, how can SAVE possibly progress now knowing that at any point in the future the Government could claim the oil interest back into state control as and when they feel like it, should they get financial backing, just like Chad have done. How can we possible proceed with a massive purchase like this in a despot country like this.
IT'S OVER ! and AK needs to RNS now !
Z - do you think the relist price would be the same if deal fell through or we come back without approval? Ie if we came back without approval the market would price nothing in for the deal and would assume it would eventually fail anyway?
Exactly Trustilie. And that’s on top of all the difficulties in Sudan at the minute to ever consider it I would think. The Chinese have pumped billions in already. Glencore got caught out on their loan to Chad so plenty of lessons to be learned. My point is on my belief on a possible protocol of govt approval coming last in the queue.
Zengas - Who in there right mind would grant a loan of such proportions when the government can barely service employee salaries. There other income stream is not big enough to service debt all it will take is embargo on exports and the debt is stranded.
Whereas an entity can like savannah has access to debt because they can service from another asset like accugas etc..............
We do see acquisitions agreed between buyers/sellers in the west and UK where sometimes for strategic or important matters need government clearance later.
UK Gov - "The government will review your acquisition. It can either clear your acquisition, impose certain conditions, or block or unwind it" - from the national security and investment act.
It looks like in all cases the deal is made first as we see what AK and any of the other countless CEOs have and are doing - ie sign the SPA, get shareholder approval and wait for government ok. I can't see an African gov 'OK'ing a deal because they may say your own shareholders haven't even approved it yet (don't waste out time going through all the processes until you have yours in line first so to speak) - so again i feel it follows a protocol. I think Petronas used Jefferies to handle their African asset sales (from AI). You only have to look at the amount of companies vying for the Assala assets - its unlikely they all sought government clearance first. It was the selection process by the sellers advisors to reach preferred bidder status, then in agreeing the deal which then in turn goes to the governement for approval which can take months or longer.
By comparrison to the West - some of these African countries have absolute miniscule GDP compared to the likes of the UK etc so you can see how a country like S.Sudan (and others) that get about 80%+ and in some cases all of it's income from oil - therefore will view them strategically and of national importance.
The danger is of course in governments borrowing to buy these assets making them more and more reliant on the oil and all their eggs in one basket come a downturn in the future.
Yes, totally agree with all that RR. Hopefully AK can allay some fears and worries on Friday.
IZ - I had this convo with IR a few months ago and SAVE / Petronas did an inordinate a mouth of DD and relationship building with the President of SS and key ministers. Whilst (as we know these deals are fraught with risk) I don’t think SAVE could have possibly done anymore before signing the SPA.
However, with all the embedded corruption in Africa along with many changes of ministers, we are forever trying to shoot a very fast moving target.
As we know, we have no real idea what is actually going on but if the news from this week does turn out to be a RED LINE fail for this transaction, I genuinely feel for AK and the team alsong with all the loyal shareholders invested here.
One of my concerns is that SAVE have done all the heavy lifting, helping work on licence extensions, ESG strategies, workovers and future well planning etc etc etc etc and then when everything is straightened out as much as possible, some other entity comes and signs on the dotted line with Government blessing and one or two suitcases being dropped on parachutes to peoples back gardens.
Should SS fail and we don’t have another ‘oven ready’ deal, I do feel that we need to review the SAVE strategy and specifically the ‘Projects that matter’ bit!
Anyway, let’s hope we learn a reasonable amount more on Friday but I guess there is always a chance as they don’t want to go too public on the real situation and we just see another extension.
Finally, although I said on the other board that I’d like us to come back without the explicit Gov consent, another way of playing it could to play hard ball. I.e. say to Gov ‘right we are ready to go but wont do so without your 100% backing and explicit consent’. I now think this would be the best way to go so that we dont end up in another Chad situation. Should SS not sign off and we pull out, it would send a very strong message out to the industry that SS are NOT IN FACT open for business. They probably would not give a toss but at least we would know where we stand and could crack on with come other stuff that would earn us some incremental $$$.