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LONDON (Alliance News) - San Leon Energy PLC Thursday said it will submit its payment for the acquisition of Canada's Mart Resources Inc slightly later than originally planned.
In January, San Leon unveiled plans to enter the Nigerian onshore oil and gas production market through a USD180.0 million transaction that included the acquisition of the Canadian firm.
The AIM-listed company sealed a deal to acquire Mart Resources, an exploration and production company, for USD62.6 million. That was being facilitated through a binding arrangement agreement, with San Leon originally aiming to pay that amount into an escrow account before Wednesday.
However, San Leon said it has now agreed to extend that by one week until next Wednesday to give it more time to complete the financing so it can fund the deal.
Importantly, the change of date has been agreed through an amendment agreement and the other terms and details of the deal remain unchanged. San Leon said it would pay a "reverse break fee" of USD2.2 million to Mart if it failed to place the funds into the escrow account by the original date, but did not state whether this is applicable following the amendment.
"We look forward with confidence to funding the escrow on or before February 24, and moving to complete the Nigerian transaction as outlined on January 22, subject to necessary approvals," said Chairman Oisin Fanning.
The result of the acquisition, together with a restructuring, is that San Leon will secure a 9.72% indirect economic interest in the OML 18 block, onshore Nigeria. San Leon will have no other assets or liabilities resulting from the transaction outside of the OML 18 block.
Martwestern Energy Ltd, a Nigerian holding company which is a major shareholder in the operator of OML 18, is owned by Mart Resources, together with Midwestern Oil & Gas Ltd and SunTrust Oil Co Ltd, both Nigerian companies.
In a restructuring deal between Midwestern and San Leon, which will include the acquisition of SunTrust's 20% stake in Martwestern, Midwestern will assume the assets and liabilities of Mart not connected to OML 18.
The remainder of the USD180 million transaction cost is accounted for by the SunTrust acquisition and restructuring, as well as transaction fees. San Leon said it will fund the costs of the deal by issuing debt instruments, and that its existing shareholders will not be diluted, thanks to the debt-based funding of the deal.
San Leon shares are currently suspended.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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