LONDON (Alliance News) - San Leon Energy PLC on Friday said its shareholder Toscafund Asset Management LLP has provided further debt funding to secure the final part of its acquisition of an indirect interest in a producing oilfield in Nigeria.
San Leon signed an agreement in January to secure a 9.72% indirect economic interest in OML 18, an onshore field that is already producing oil and formerly operated by oil major Royal Dutch Shell PLC.
The OML 18 production arrangement is structured in three parts, of which the initial stage was completed in March, when San Leon finalised its purchase of Mart Resources Inc.
Mart Resources held a stake in the Midwestern Leon Petroleum Ltd, a special purpose vehicle which is a major shareholder in the operator of OML 18, Eroton.
The final stage of the acquisition is to buy the remaining 20% interest in Martwestern, which holds a 90% stake in Eroton, and, on Friday, San Leon said Toscafund had provided it with USD12.5 million to allow it to purchase part of this 20% and secure the right to purchase the rest of the 20% interest by July 31.
The remaining USD57.5 million needed to complete the transactions will be obtained through loan notes to Toscafund.
"The company is again grateful to Toscafund for providing further debt funding to secure the last part of the acquisition, while the company organises placing funds and finalises its AIM readmission document. The company is proposing to repurchase all loan notes, subject to San Leon shareholder and regulatory approvals, using funds from the proposed placing," said Executive Chairman Oisin Fanning.
"On completion, San Leon will have full equity rights and associated potential upside as an indirect shareholder in OML 18, but will also have the protection of having provided its investment through the loan notes structure, which once purchased from Toscafund, will be fully repayable by Midwestern Leon Petroleum to San Leon with a 17% coupon per annum over four years," Fanning added.
San Leon shares have been suspended since early 2016.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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San Leon (SLE)