San Leon Energy PLC Update on proposed refinancing (2928K)
20 Décembre 2022 - 8:00AM
UK Regulatory
TIDMSLE
RNS Number : 2928K
San Leon Energy PLC
20 December 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310. With the publication of
this announcement, this information is now considered to be in the
public domain.
20 December 2022
San Leon Energy plc
(" San Leon " or the " Company ")
Update on proposed refinancing, balance sheet and working
capital position
Potential disposal of Oza investments
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, provides the following
update in relation to the Company's proposed refinancing
discussions, its US$50 million loan facility and its working
capital position. The Company also announces the proposed sale of
its non-core investments relating to the Oza oil field .
As disclosed in the AIM Admission Document that was published on
8 July 2022 (the "Admission Document") , a loan facility of US$50
million has been made available to the Company by MM Capital
Holding Limited (" MM Capital ") for the purposes of funding the
Company's working capital requirements and financing the Further
ELI Investments (the " MM Capital Facility "). W hilst the MM
Capital Facility is a legally binding facility agreement in place
between the Company and MM Capital, the Board of San Leon has
delayed utilising the facility as it believes that additional or
alternative financing might be available on terms that may be
better aligned with the Company's overall strategic and financing
objectives . Specifically, a prospective alternative lender has
also indicated that it may have an interest in taking an equity
position in San Leon by acquiring existing ordinary shares from
certain shareholders. As the Company seeks to diversify its
shareholder base and build long term support ahead of the planned
expansion of its activities in Nigeria, the Board considers that
financing on this basis represents a substantial improvement over
the MM Capital Facility .
As previously announced , San Leon is in discussions with a
prospective alternative lender in this regard. It is the Board's
view that these two financing sources are mutually exclusive and,
noting what it believes to be considerable advantages with the
alternative counter party , the Board does not consider it to be in
the Company's or shareholders' best interests to draw down the MM
Capital Facility at this time.
On 1 December 2022, the Company announced that discussions on
the alternative financing were expected to be concluded by
mid-December 2022 . However, given its more extensive terms, this
process has since been proved to be more complex than anticipated ,
and the timetable has become more protracted, especially against
the backdrop of the current macroeconomic environment .
Conversations remain very positive but, w ith the holiday period
fast approaching, the Boar d now expects this alternative facility
to be finalised and available for draw down early in the New Year
and a further announcement will be made at that time by the
Company, as appropriate .
As a further source of near-term funding, t he Board is also
currently in advanced negotiations in respect of the proposed sale
of the Company's non-core investments relating to the Oza oil field
in Nigeria (the " Proposed Non-core Investments Sale "), which had
a book value of US$5.6 million in San Leon's unaudited interim
results for the six months ended 30 June 2022 , to generate working
capital. All terms for the Proposed Non-core Investments Sale are
in agreed form, however, San Leon expects the transaction to
formally be entered into once the purchaser has finalised its own
financing arrangements. It is San Leon's understanding that this
could be imminent and the Company is in daily contact with the
prospective buyer in this regard. A further announcement will be
made at that time by the Company, as appropriate.
Since t he publication of the Admission Document , the Company
has not received any material cash inflows but, during that period,
the Company has taken steps to manage its overheads whilst it
explores these alternative refinancing options . In addition,
pending securing funding from one or both of these sources, the
Company has not yet been able to progress the Further ELI
Investments and several of the Company's trade creditors ,
predominantly related to adviser and other fees incurred in
relation to the proposed Midwestern Reorganisation and the Proposed
Further ELI Investments , remain outstanding . San Leon is in
regular dialogue with both its creditors and ELI in respect of
timing for settling these payments.
It is important to note that, notwithstanding this short term
cashflow delay, San Leon's balance sheet is robust with, in
particular, US$112.6 million owed to it by Midwestern Leon
Petroleum Limited (the " MLPL Loan ") and US$23.0 million owed to
it by ELI. The MLPL Loan will be extinguished following the
proposed Midwestern Reorganisation but, for the time being, remains
a valid obligation and therefore a significant asset of the
Company's. Aside from Oza, the Company also holds non-core assets
in other countries which may have a meaningful value, such as the
4.5% net profit interest in the Barryroe Field, which lies in
shallow water of about 100m some 50km off the south coast of
Ireland.
For the time being the Board is satisfied that its alternative
refinancing options are progressing satisfactorily, even if slower
than initially hoped, and furthermore that conversations with those
creditors who are due outstanding payments are not producing any
undue pressure on San Leon. Nevertheless, the Board continues to
keep these matters under review and will take actions to protect
the interest s of both shareholders and creditors as appropriate.
As set out in the Admission Document, the Further ELI Investments
are contingent on San Leon securing further funding, whether from
the MM Capital Facility or otherwise, and the Board are focused on
finalising this.
Unless otherwise defined herein, the capitalised defined terms
used in this announcement have the same meaning as those used in
the Company's Admission Document.
Enquiries:
San Leon Energy plc +353 1291 6292
Oisin Fanning, Chief Executive
Julian Tedder, Chief Financial Officer
Allenby Capital Limited
(Nominated adviser and joint broker to the Company) +44 20 3328 5656
Nick Naylor
Alex Brearley
Vivek Bhardwaj
Panmure Gordon & Co
(Joint broker to the Company) +44 20 7886 2500
James Sinclair-Ford
John Prior
Tavistock
(Financial Public Relations) +44 20 7920 3150
Nick Elwes
Simon Hudson
Plunkett Public Relations +353 1 230 3781
Sharon Plunkett
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