San Leon Energy PLC Conditional Payment Waiver for MLPL Loan Notes (3728E)
07 July 2021 - 4:00PM
UK Regulatory
TIDMSLE
RNS Number : 3728E
San Leon Energy PLC
07 July 2021
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.
7 July 2021
San Leon Energy plc
("San Leon" or the "Company")
Conditional Payment Waiver in relation to MLPL Loan Notes
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, provides the following
update regarding its loan notes from Midwestern Leon Petroleum
Limited ("MLPL") (the "Loan Notes").
As previously announced by San Leon, during the course of this
year, San Leon was due to receive, under the Loan Note instrument
which governs the loan it made at the time of its investment in OML
18, its final payments of over US$98 million in three equal
instalments, commencing in July 2021 and completing by December
2021.
MLPL is part of the structure through which San Leon holds its
current 10.58% indirect economic interest in OML 18. San Leon
currently has a 40% equity interest in MLPL with the remaining
interest in MLPL being owned by Midwestern Oil and Gas Company
Limited ("Midwestern"). Midwestern is also the guarantor of the
Loan Notes. MLPL has a 100% equity investment in Martwestern Energy
Limited ("Martwestern"), which in turn has a 98% economic interest
in Eroton Exploration and Production Company Limited ("Eroton"),
which holds a 27% working interest in OML 18 and is its
operator.
On 24 June 2021, San Leon announced that, inter alia, the
Company was in preliminary discussions with Midwestern in relation
to a transaction that would effect a reorganization to consolidate
Midwestern's holdings in the Company and MLPL into a single holding
in the Company, with the Company holding the remaining 60% equity
interest in MLPL it does not currently own (the "Potential
Transaction"). It is expected that, inter alia, as part of the
Potential Transaction, the amounts owed to San Leon by MLPL
pursuant to the Loan Notes will be taken into account in the
overall structure and eliminated from the resulting structure.
As indicated in the Company's announcement of 24 June 2021, San
Leon's discussions and considerations regarding the Potential
Transaction described above (and in the Company's announcement of
24 June 2021) are at an early stage and will therefore be subject
to a number of factors. As such, there is no certainty that such
t
ransactions will proceed nor any certainty regarding the terms on which they would proceed.
However, in light of the discussions with Midwestern regarding
the Potential Transaction, San Leon has agreed with MLPL,
Midwestern and Martwestern to a conditional payment waiver in
respect of the repayment of approximately US$32 million of MLPL's
Loan Notes and interest that fell due on 5 July (the "Conditional
Payment Waiver"). The Conditional Payment Waiver expires at the end
of August 2021 or, if sooner, the termination of discussions or the
signing of an agreement to effect the Potential Transaction, and
interest will accrue on this installment of the Loan Notes over
this period. The sums to which the Conditional Payment Waiver
relates (and those falling due within 30 days after the expiry of
the Conditional Payment Waiver) will be payable 90 days after such
expiry, save for, inter alia, if there is an event of default.
Midwestern and MLPL are related parties of the Company for the
purposes of the AIM Rules by virtue of Midwestern holding more than
10% of the existing Ordinary Shares in the Company and the level of
Midwestern's current interest in MLPL . The Conditional Payment
Waiver is therefore a related party transaction under the AIM
Rules. The Directors of San Leon (excluding Adekolapo Ademola who
is not considered to be independent as he is a representative of
Midwestern on the Company's board ) consider, having consulted with
the Company's nominated adviser, Allenby Capital Limited, that the
terms of the Conditional Waiver are fair and reasonable insofar as
the Company's shareholders are concerned.
Enquiries:
San Leon Energy plc +353 1291 6292
Oisin Fanning, Chief Executive
Allenby Capital Limited
(Nominated adviser and joint broker to the Company) +44 20 3328 5656
Nick Naylor
Alex Brearley
Panmure Gordon & Co
(Joint broker to the Company) +44 20 7886 2500
Nick Lovering
Brandon Hill Capital Limited
(Joint broker to the Company) +44 20 3463 5000
Oliver Stansfield
Jonathan Evans
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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