Member Info for scotpak

For those interested, the most recent IMF consultation document on south Sudan released on 10th June: https://www.imf.org/en/News/Articles/2024/06/10/pr-24210-south-sudan-2023-art-iv-consult-1st-and-2nd-reviews-extends-program

The only way they get around the transparency issue is if they buy the assets themselves but they dont have the funds. The other option would be to nationalise the assets like Chad, but that would surely scupper the IMF deal and lead to a debt default. Hopefully they end up with no choice but to go ahead with deal.

Have to say its a pity we are dealing with such regimes. Angola, Gabon, Nigeria are much better places on a relative basis.

Definitely needs some publicity. In terms of price action we have only really moved from the bid to the offer price. Yes its a big bid/ offer spread but still a disappointing reaction so far. Hopefully picks up soon.

I think its fair to say Savannah's financials were hit by a number of one-offs. If you adjust for the late payment you mentioned, net debt/ EBITDA (net lev) falls from 2.6x to 2.0x. (So almost in line with last years 1.8x). Then you have to look at the difference between actual adj EBITDA ($184m) and Nigerian business EBITDA ($214m). SAVE say that the majority of the difference was due to central costs largely related to set up costs for the CHAD business. Given Chad is gone, those costs will not be repeated. Thus if you use the nigerian EBITDA and adj for late payment net lev falls to 1.75x (a touch lower than last year). For completeness you also have to acknowledge the big cash value lost due to the huge depreciation of the NAIRA. Im not going to adjust for that, but would be unreasonable to expect net leverage to have been closer to 1.0- 1.5x type area.

So all in all results were pretty decent. Hopefully one-offs like these will not be repeated next year.

Sorry should have said, converting this transitional facility into a more permanent and larger multi-tranche terms loan. I would imagine it could be a 4 to 5 year term loan combined with a fully committed revolving credit facility (often used by companies to manage working capital fluctuations).

Not sure if others have mentioned but if you look at page 22 on press release you can see the definition of the Naira "transitional facility" >> An agreement signed by Accugas with a consortium of five Nigerian banks to provide a new NGN340 billion Naira denominated four-year term facility which will be utilised to repay the Accugas US$ Facility.

At the current USDNGN rate of 1,471, this equates to $231m, so not sizeable enough to match the full $342m size of the accugas facility.

Anyway, this is still a positive development. It means the banks have granted a sizeable bridge loan, with the intention of completing a longer maturity term loan in the very short term. This is quite common in corporate financing.

Ive recently bought in here too as valuations just seem far too cheap. Given ultra-low market cap perhaps good news takes a while to filter through given lack of involvement of institutional players. Perhaps others who are involved in companies of this size could chime in as to the zero response of the share price in recent weeks?

In the short term, yes, Naira appreciation would allow FX losses to be clawed back. However in the long term, ideally post the refi of the accugas facility to local currency, Naira depreciation wouldnt be a bad thing. As in you would be using USD revenue to pay down Naira debt which is depreciating (vs the USD) and thus getting smaller.

Im also hoping that with recent FX reforms and improved FX liquidity, SAVE wont be required to hold so much cash on hand in Naira.

Hi Trustlie

Was going to type a lengthy email, but dont need to given Rumplestielzchen is spot on!

NAIRA 3.6% stronger today (vs USD) after Nigerian central bank hiked rates to 26.25% (vs expectation of 25.75). Hopefully the start of an appreciating trend.

We are all completely fed up but lets look at the positives. They still seem to be implying completion is still on the cards, they have revamped the website and have set up a new oil and gas holding company (which may become an operating company at a later date). Maybe we have some good news around the corner. Fingers crossed for all.

You are spot on Supercooper. I got confused by the article as it seemed to imply they are prepaying in advance. But looking up the bond payment schedule a $100m payment was due every year on the 15th of May.

Whilst meaningless chat continues on this board, Tullow have put out a press release saying that they are to prepay $100m of their secured 10.25% bond on May the 15th. This is obviously a good signal for their current cash generation and liquidity.

This Chad article cites only a statement from the Chad govt not from the Paris court of arbitration itself. Also it only discusses the fact that Chad's pipeline accounts cannot be frozen. No mention of the more important issues of the nationalisation itself and the related theft of assets. As mentioned below, this could simply be Chad trying to put a spin on a meaningless aspect of this case. Like others, a frustrated long term holder here. Fingers crossed that all those boxes start to get ticked off this year.

People are starting to panic on this board. This was always a super high risk investment. Anyway, if you look at the recent STIFEL research report, they have a share price valuation of 125p. Selene represents 69p of that valuation whilst Pensacola is only 42p. Stifel have not yet reduced their Pensacola valuation given deal falling through is still not 100%. Similarly, Cannacord have a 110p valuation. They have Selene at 89p & Pensacola at 8p (they have reduced this from 65p). Anyway the point I am making is that Selene still makes up the majority of the share's valuation. (both above reports mentioned were released post the recent RNS)

Just rallied too far and too fast. Positive fundamentals behind the move remain intact. Hopefully we get some consolidation and then NGN continues its rally.

Yes, the Gas revenues are fixed to a USD rate but paid in Naira.

Local currency Nigerian govt bonds trade at a yield of 19%, thus any debt facility we get will have a similar or higher rate. But the rate isnt so important. What is important is that an expensive USD facility is being replaced by a local currency facility. Given SAVE revenues are in USD or are linked to contract fixed in USD terms, this will be a BIG positive.

We need some of the boxes in your list to be ticked off!! Otherwise we seem to be forever stuck in this cycle of: shock- anger - disappointment - grief and finally hope!!

Gutted on delays like everyone else. Hopefully there is some progress in the background, hence the need to keep giving dates/ timelines. On a more positive note the NAIRA has now strengthened around 22% from its lows. Hopefully the debt facility refi isnt too far off.