SacOil Holdings Limited Loan Settlement Agreement (6448J)
April 08 2015 - 10:00AM
UK Regulatory
TIDMSAC
RNS Number : 6448J
SacOil Holdings Limited
08 April 2015
SACOIL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE Share Code: SCL AIM Share Code: SAC
ISIN: ZAE000127460
("SacOil" or "the Company")
LOAN SETTLEMENT AGREEMENT
SacOil is pleased to announce that it has entered into a
settlement agreement (the "Settlement Agreement") with Energy
Equity Resources Norway Limited ("EERNL") relating to outstanding
loan amounts owing by EERNL and its subsidiaries ("EERNL Group")to
the Company.
The EERNL Group's loans originated from the joint participation
in Oil Prospecting Licence ("OPL") 233 in Nigeria, whereby the
Company advanced funds on behalf of EERNL Group to secure the
participation interest in OPL 233.
In October 2011, the Company advanced US$5 million in loans to
EERNL (the "Loans") to fund the obligation of its subsidiary EER
233 Nigeria Limited ("EER 233") to pay a performance bond in
respect of OPL 233.
The Loans carried an interest rate of between 25% per annum and
32% per annum, with payment due in various instalments. The Loans
were secured in SacOil's favour against EER 233's equity,
effectively giving the Company security over EER 233's 20% interest
in OPL 233.
The EERNL Group has to date been unable to settle the amount
outstanding under the Loans, which amounts to approximately US$24.2
million.
As at 31 August 2014, the Loans have not been impaired in
SacOil's accounts as the value of the security notionally exceeds
the carrying value of the Loans. SacOil will provide a further
update with regard to the accounting treatment of the Loans in due
course.
Further, pursuant to a farm-out agreement executed between
SacOil, EER 281 and TransCorp in relation to OPL 281, the Company
advanced funds on behalf of the EERNL Group to secure the farm-in
into OPL 281. The total sum due to be repaid by TransCorp following
SacOil's termination of its participation in the OPL 281 farm-in
can be paid directly into an account nominated by the EERNL
Group.
In the light of the above, SacOil and EERNL have signed the
Settlement Agreement, the salient terms of which are set out
below:
OPL281
-- In full and final settlement of any amounts advanced to the
EERNL Group by SacOil in respect of OPL 281, EER 281 on behalf of
the EERNL Group has nominated a SacOil bank account for the
repayment of the full amount due from Transcorp. As previously
announced, this will effectively return $12.5 million plus interest
to SacOil.
-- SacOil will indemnify EERNL Group against any and all costs
incurred or sustained as a result of any counterclaims by
Transcorp; in return, EERNL Group has ceded its rights to SacOil
281 relating to any claims that it has against Transcorp.
OPL 233
The repayment of the Loan relating to OPL 233 has been
restructured as follows:
-- Interest freeze from 30 November 2014 on the outstanding Loan balance of US24.2 million;
-- EERNL Group's right to the US$ 2.25 million promote fee,
payable by SacOil to EERNL Group upon receipt of government
approval for the assignment of interest in OPL 233, is set off
against the outstanding balance on the Loans;
-- Any and all proceeds subsequently received by EERNL Group
through its involvement in OPL233 to be allocated to the repayment
of the Loans;
-- If, at the time of first oil production from Oil Mining
Licence 113("OML 113") there continues to be sums outstanding
pursuant to the Loans, 50% of the net OML 113 cash flow amounts -
after providing for the debt service costs, capital expenditure and
other operating costs relating to OML 113 - received by EERNL will
be paid to SacOil semi-annually to reduce the outstanding Loans, up
to US$ 5 million.
General
-- Terminates the Master Joint Venture Agreement between SacOil
and EERNL, dated 24 September 2010, including all rights and
obligations consequent thereto.
In conclusion, the Settlement Agreement restructures EERNL
Group's debt obligations to SacOil in exchange for SacOil's waiver
of certain rights and interests emanating from the Loans. However,
SacOil retains the existing security over EERNL Group's 20%
interest in OPL 233.
Dr Thabo Kgogo, CEO of SacOil, commented, "This settlement
reflects the restructuring of the loans advanced to the EERNL Group
and the consequences of our termination of the OPL 281 contract
with Transcorp. It also brings an end to the Master Joint Venture
Agreement with EERNL with regards to the joint investigation of new
exploration opportunities. This is in line with our renewed focus
on development and production assets. Overall, we have negotiated
this settlement to restructure the EERNL Group's debt obligations
and enhance our ability to recover the sums owed to the Company and
its shareholders.""
JSE Sponsor
PSG Capital Proprietary Limited
8 April 2015
For further information please contact:
SacOil Holdings Limited +27 (0)11 575 7232
finnCap Limited
(Nominated Adviser and Broker)
Christopher Raggett +44 (0) 20 7220 0500
FirstEnergy Capital
(Financial Adviser and Joint Broker
UK)
Travis Inlow +44 (0) 20 7448 0200
Instinctif Partners London
(UK Investor Relations)
David Simonson / Anca Spiridon +44 (0)20 7457 2020
Instinctif Partners Johannesburg
(SA Investor Relations)
Nicholas Williams / Tshepo Mophiring +27 (0)11 447 3030
This information is provided by RNS
The company news service from the London Stock Exchange
END
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