(Alliance News) - Savannah Petroleum PLC on Friday said it has entered into an unsecured loan facility, with an initial tranche of USD5 million expected to be drawn immediately.
Subject to mutual agreement between Savannah and the loan provider, an additional tranche of up to USD5 million is available to be drawn within a two-year period. The facility is being provided by funds managed by Riverfort Global Capital Ltd and Yorkville Advisors Global LP, and provides Savannah Petroleum with additional liquidity to fund working capital and general corporate purposes, ahead of the planned completion of the Seven Energy transaction.
In 2017, Savannah agreed to buy an interest in two assets of Seven Energy. As anticipated, the transfer is subject to the payment of all taxes due within 90 days of the receipt of the approval letter, which was granted on August 19.
The oil & gas company said the loan has a fixed interest premium of 7% - payable on the USD5 million and any future amounts drawn - to be paid at maturity. the amounts drawn down under the facility can be repaid at any point up until the initial loan maturity date of January 17, 2020, Savannah Petroleum said.
If the facility has not been fully repaid prior to January 17, 2020, or Savannah Petroleum has announced that it has permanently decided not to proceed with the Seven Energy transaction, any amounts due and outstanding can be converted at the facility provider's discretion.
"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.
"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," added Semega-Janneh.
Savannah Petroleum shares were trading 4.7% higher in London on Friday at 23.20 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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