Mart Resources raises funding of Shell assets to N37.2 billion

    Written by Roselina Okere

  MART Resources has arranged to increase its existing secured term loan credit facility with Guaranty Trust Bank Plc  (GT Bank) from $175 million (N28 billion) to $232.5 million (N37.2 billion).

  The increased secured loan credit facility has a term of five years and bears interest at 90 days LIBOR plus four (floor of 8.25 per cent), which interest rate is unchanged from the terms of the Company’s existing facility with GT Bank.
  Besides, the company has entered into an assignment agreement with The Shell Petroleum Development Company of Nigeria Limited (SPDC), Total E&P Nigeria Limited and Nigerian AGIP Oil Company Limited (collectively, the “Sellers”) to acquire a 45 per cent participating interest in Nigerian Oil Mining Lease 18 (“OML 18”) and all associated assets, wells, pipelines and infrastructure.

  The facility with the GT Bank is expected to assist the company in funding its share of the closing cash consideration for the asset.

  Mart Resources said in a statement that the remaining 55 per cent participating interest of OML18. would be retained by the Nigerian National Petroleum Corporation (NNPC).

  It noted that the acquisition is subject to numerous terms and conditions including receipt of Nigerian Government approval.

  The acquisition cost of the Consortium’s participating interest in OML 18 will be satisfied by way of senior secured, non-recourse reserves-based financing secured against the Consortium’s participating interest in OML 18 and all petroleum sales revenues accruing from OML 18; and an equity contribution by the Consortium members proportionate to their direct or indirect working interest in OML 18.

  The company said that it will hold an indirect working interest in OML 18 of approximately 10 per cent through its indirect ownership position in Consortium SPV. “In consideration for its indirect working interest in OML 18, Mart has advanced $134 million, representing its proportionate share of  the initial bid deposit paid by the Consortium to the Sellers; the remaining closing cash consideration; and transaction costs and initial working capital for Consortium SPV. The closing cash consideration is refundable should the transaction not be completed”.

  Chairman and Chief Executive Officer of Mart, Wade Cherwayko, commented on Mart’s acquisition of an indirect working interest in OML 18: “Mart has been looking for an opportunity for several years to diversify its portfolio of assets in Nigeria and is very happy to have the opportunity to participate in a producing oil mining lease, which has become available as a result of this transaction. OML 18 is a significant asset with considerable exploration upside and production.

The other Consortium SPV members are Nigerian companies with considerable oil and gas exploration and development experience who are familiar with the region and who are expected to be able to work effectively with the local communities to further materialize the exploration and production potential of this asset.”

  The company explained that the proposed acquisition provides Mart the opportunity to diversify its assets and operations in Nigeria beyond its current successful operations at the Umusadege field.

  It stated: “Upon the closing of the acquisition by Consortium SPV, Mart will become the holder of an indirect working interest in OML 18 of approximately 10 per cent through its existing ownership of shares in a holding company (“Holdco”) that owns 50 per cent of the shares of Consortium SPV. The closing of the acquisition of the 45 per cent participating interest in OML 18 by the Consortium SPV is subject to a number of terms and conditions, including receipt of applicable Nigerian government and other regulatory approvals.
 

Culled from http://www.ngrguardiannews.com/business