• Oando clinches funding for ConocoPhillips assets

    Oil firm Oando Energy Resources has secured the necessary funding to acquire the upstream oil and gas business of ConocoPhillips in Nigeria.

    The company says it will spend a total of $1.55 billion acquiring the assets. That amount breaks down into $1.05 billion after deducting about $500 million in deposits – $450 million already paid and $50 million to be paid to compensate for the extension of the deal’s closing date from January 31st to February 28th.

    The transformational purchase is expected to boost Oando’s production capacity from its present 5,000 barrels of oil per day to 50,000 barrels of oil per day.

    Oando said it plans to partly fund the acquisition with funds from a corporate facility and reserve-based loan agreement. The former is worth $350 million and is being provided by a syndicate of Nigerian lenders as well as FBN Capital and FCMB Capital Markets, which are acting as mandated lead arrangers on the deal.

    The reserve-based loan amounts to $450 million of senior secured debt and is being lent by a group of Nigerian and international banks including Standard Chartered, BNP Paribas, Standard Bank of South Africa and Standard Chartered.

    In addition to the $800 million of bank debt, the balance of funds will come from a proposed private placement of units from the company, and a convertible loan from OandoPlc, the parent company of Oando Energy Resources.

    The deal is still subject to, among other things, approval from Nigeria’s Minister of Petroleum Resources.

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