Savannah Launches Seven Energy Bond Offer

London-listed Savannah Petroleum is offering cash and shares to bondholders of Nigeria's indebted gas producer Seven Energy in exchange for some Nigerian assets, Seven Energy said January 24.  The offer expires 4pm London time February 6 2018.

Although not detailed in the latest Seven release, Savannah two months ago explained it would offer $87.5mn cash and $52.5mn in newly-issued Savannah shares to the holders of Seven's current 10.25% bonds, which have junk status in some books. The mainly upstream gas assets that Savannah plans to acquire in Nigeria from heavily-indebted Seven were also listed on November 15. 

Tiny Savannah’s move is seen as a planned reverse takeover, as it has non-producing acreage only in remote landlocked southeast Niger. Some of that it describes as "drill-ready", but it is all remote from existing pipeline infrastructure – and thus any discoveries oil or gas found would be hard to sell. Savannah shareholders include several UK and other pension and investment funds.

Debt ratings agency Fitch on November 23 2017 withdrew its rating for the 10.25% Seven Energy bonds, which already had a junk bond 'C/RR6' rating, saying that Seven had chosen to stop participating in the rating process and that Fitch therefore no longer had sufficient information to maintain the ratings.