Seven Energy International Limited (“Seven Energy”) and its wholly-owned subsidiary Accugas Limited (“Accugas”), on Monday 31st March 2014, closed a US$170 million 5.5-year medium-term acquisition finance facility (the “Facility”) with FBN Bank (UK) Limited and Ecobank Nigeria Limited. FBN Capital Limited acted as Structuring Bank, sole Initial Mandated Lead Arranger, Financial Modelling Bank and Global Facility Coordinator. Aluko & Oyebode acted as lenders legal counsel, Royal HaskoningDHV Nederland BV represented the lenders on environmental / technical due diligence matters. UUBO and Addleshaw Goddard acted as the Borrower’s local and international legal counsels respectively.
The Facility part-finances the acquisition of the entire issued share capital of East Horizon Gas Company Limited (“EHGC”) for a total consideration of up to US$250 million. EHGC was established by Oando Plc with the intention of constructing and operating an 18-inch, 128 km gas pipeline that connects with the Obigbo-Alscon pipeline at Ukanafun to supply gas to an industrial offtaker located in Mfamosing, Cross River State, and to meet the needs of other industrial users in the Calabar region. Seven Energy’s acquisition of EHGC is in line with its strategic plans to expand its gas infrastructure assets in the south east Niger Delta. Through its assets and subsidiary, Accugas, Seven Energy has a number of infrastructure projects in the region, including a gas processing facility at the Uquo Field and a gas pipeline network, which will have the capability to supply gas in the Port Harcourt, Aba and Calabar areas.
In consolidating the gas infrastructure assets of Accugas and EHGC, Accugas aims to strengthen its distribution platform, increase efficiency and broaden its geographical reach, furthering Seven Energy’s intention to create a leading gas distribution business in Nigeria. Commenting on the transaction, Phillip Ihenacho, Chief Executive Officer, Seven Energy said: “This is a landmark transaction for us. We are delighted to expand our midstream operations in Nigeria with this investment. It is a perfect fit to our strategy of investing in core midstream infrastructure assets in the south east region of the country. I would also like to thank the entire team for their achievement in bringing this important financing transaction to a close.”
Commenting on the transaction, Bruce Burrows, Chief Financial Officer, Seven Energy, commended the Lenders, FBN Bank (UK) Limited and Ecobank Nigeria Limited, for their support, and in particular, their dedication to ensure that the completion of the EHGC acquisition process was in line with the sponsors’ timetable. Mr. Burrows also noted FBN Capital’s role, particularly in working closely with Seven Energy, the Lenders and the various independent consultants in concluding the transaction. Kayode Akinkugbe, Managing Director & Chief Executive Officer of FBN Capital Limited said: “FBN Capital is very proud of the instrumental role it played in assisting Seven Energy to structure and arrange the financing for the acquisition”.
He went further to state: “FBN Holdings Group feels a strong sense of responsibility towards fostering growth in the power, gas pipeline and oil and gas sectors and we will continue to deploy our extensive debt arranging experience and structuring expertise in executing robust transactions in record time”. Speaking on the transaction, Patrick Mgbenwelu, Director and Head Debt Solutions, FBN Capital Limited, said: “We appreciate the responsibility and trust Seven Energy has placed with FBN Capital to advise and arrange the financing for the acquisition of EHGC. FBN Capital remains committed to further strengthening this relationship and supporting Seven Energy in realising its various financing goals and objectives”.