San Leon shops $5m for indirect investment in OML 18
Sopuruchi Onwuka, with agency reports
San Leon Energy announced a further investment of $5.0 million in Energy Link Infrastructure (Malta) Limited (ELI), which owns the new pipeline and the floating storage and offloading vessel for the OML 18 oil and gas field in Nigeria.
This further investment in ELI is being funded by the issue of a secured $5.0 million loan by the company’s largest shareholders, certain funds managed by Toscafund Asset Management LLP.
The loan carries a coupon of 17 percent per annum over 4 years and is repayable quarterly following a one-year moratorium from the date of the loan being advanced. In addition, the loan entitles San Leon to purchase a further 4.2 percent of ELI’s equity at nominal value in furtherance of the company’s objectives of becoming ELI’s largest shareholder.
Together with San Leon’s existing shareholding in ELI and, taking account of certain anti-dilution provisions relating to the company’s previous investments as well as other pending purchases, San Leon expects to increase its ownership of ELI to approximately 16.2 percent following the loan being made to ELI.
In addition to this investment, San Leon has agreed a period of exclusivity with ELI through to the end of August 2023 to make further investments, of up to $37.0 million in ELI.
These further investments, which may be made via a combination of cash and issuing new shares in San Leon, which would be on the same terms as described above, and, if made, would entitle San Leon to up to a further 30.8 percent of ELI, thereby becoming the largest shareholder of ELI with approximately 46 percent (excluding the impact of further proposed investments in ELI as previously announced by the Company).
Oisin Fanning, Chief Executive officer, commented: “This new investment is an important step for both San Leon and ELI. For us, it marks the next step in our further investment in that company, as originally outlined in our admission document last July but subsequently adjusted to address developments over the past year and protects our position and past investment in ELI. Our agreement with ELI to provide further financial support should soon see San Leon become ELI’s largest shareholder. For ELI, our support enables it to address its financial obligations and continue the process of commissioning the ACOES – once operational, this is anticipated to be a profitable and cash-generative project from which San Leon expects substantial upside.”
