(Sharecast News) - Niger and Nigeria-focussed oil and gas company Savannah Petroleum has entered into an unsecured loan facility, it announced on Friday, with an initial tranche of $5m, expected to be drawn immediately.
The AIM-traded firm said the facility's key terms included fixed interest premium of 7% payable on the principal amount, and any future amounts drawn, to be paid at maturity, although the principal amount and associated iInterest premium could be repaid at any point up until the initial loan maturity date of 17 January 2020, by which point they should be fully repaid.
In the event that the facility was been fully repaid prior to the maturity date, or the company announces that it permanently decided not to proceed with the Seven Energy transaction, any amounts due and outstanding could be converted at the facility provider's discretion.
The conversion price would equal, at the election of the facility provider, either the lower of 125% of the 10-day volume-weighted average price as at the date of the facility agreement or 125% of the 10-day volume-weighted average price as at 16 January 2020, or 93% of the lowest daily volume-weighted average price of the seven business days preceding the date of the conversion notice.
Subject to mutual agreement between Savannah and the facility provider, an additional tranche of up to $5m would be available to be drawn within a two-year period, with that expected to be made available on similar terms as the initial principal amount.
The facility was being provided by funds managed by Riverfort Global Capital and Yorkville Advisors Global, and would provide Savannah with additional liquidity to fund working capital and general corporate purposes ahead of the planned completion of the Seven Energy transaction, which was expected to occur "significantly in advance" of the maturity date.
At that point, the company said it expected a cash inflow of $74m.
"We are very pleased to have accessed this loan facility which increases our liquidity and provides Savannah with access to additional capital ahead of the upcoming completion of the Seven Energy transaction," said chief financial officer Isatou Semega-Janneh.
"Following the signature of the Frontier transaction documentation, we continue to make good progress with the remaining completion workstreams, including the Seven Energy financial restructuring, and look forward to providing further updates in the coming weeks."
The Seven Energy transaction refers to the planned acquisition by Savannah of the Seven assets and the restructuring of Seven Energy's existing indebtedness, as it described in its admission document on 22 December 2017 and in its RNS announcements on 20 September and 21 December 2018.
8 Jul 2016 11:13