San Leon Nears Finish Line on Nigeria Deal

AIM-listed San Leon gave an update July 1 on its ongoing, complex and protracted deal to acquire a stake in Nigerian onshore block OML 18 in the southern Niger Delta area.

On May 24 it had said that, in order to complete the deal that would result in San Leon securing an initial 9.72% indirect economic interest in OML 18, BidCo needed to raise $70mn.

San Leon said that, on June 30, BidCo had signed agreements to complete part of the final stage of the OML 18 deal – that stage being the acquisition by BidCo of the remaining 20% interest in Martwestern. US-based Martwestern holds an initial 90% economic interest in Eroton, operator of OML 18.

San Leon’s board said it can now confirm that $12.5mn of the remaining $70mn has been provided by funds managed by Toscafund to BidCo, in order for the latter to buy part of the remaining 20% in Martwestern and secure the right to complete the final step of the OML 18 deal by purchasing all of the remaining 20% in Martwestern by end-July 2016.

Funds required to purchase all of Toscafund’s loan notes are expected to be raised through an equity placing in San Leon of at least $200mn, net proceeds of which will be used to repurchase the Toscafund Loan notes and warrants in BidCo and to subscribe for $57.5mn of new Loan Notes in BidCo. The $57.5mn is the balance of the remaining $70mn required to complete the remaining transactions and will allow BidCo to purchase the remaining 20% of Martwestern and therefore fully complete the third stage of the OML 18 deal.

Following completion, San Leon will hold 40% of BidCo, representing an indirect 9.72% of OML 18.

Mark Smedley |  www.naturalgasafrica.com