San Leon Energy has been working on a Nigerian transaction, and as a result its shares suspended, for so long that it faces the prospect of its listing on London’s AIM being cancelled.
The company must publish an admission document giving further details by July 8, it acknowledged. Should its listing be cancelled, San Leon plans to press ahead with completion of the transaction and then seek readmission to AIM later this year.
The company does expect to publish the admission document on time, it noted. That said, Nigeria has proved to be a location where deals can take longer than expected – or unexpected turns.
It must finalise three key issues, it said.
The documentation on the Eroton debt facilities, the documentation on the new San Leon loan facility and the historical financial information for the year to the end of 2021 for Energy Link Infrastructure (ELI), MLPL and San Leon.
The company suspended its shares on AIM on June 24, 2021. San Leon currently has a 10.58% indirect stake in OML 18.
The deal under way would see San Leon increase its indirect stake in Eroton to 98%, from 39.2%. As a result, the company would increase its stake in OML 18 to 44.1%. It has structured the deal as a reverse takeover, given its size.
San Leon also said the deal would help resolve a number of issues on OML 18. It will resolve a number of disputes between Eroton and OML 18 Energy Resource, a subsidiary of Sahara Group. These include various legal actions. The deal would “extinguish” these problems, leaving Eroton to focus on developing the licence.
The deal would also allow the refinancing of Eroton’s existing term loan facility with Guaranty Trust Bank.
San Leon said that it has received an indicative proposal for a loan facility to fund its acquisition in ELI and working capital requirements. It is working to convert this into a documented loan.
San Leon has also extended a payment waiver to MLPL, Midwestern and Martwestern. The principal is $82.2mn and the interest is $23.4mn. This now runs to July 8, or earlier.
San Leon CEO Oisin Fanning said OML 18 had “an excellent production history as well as a vast amount of, to date, unrealised potential”.
“It would be no understatement to say this has been a very challenging and complex undertaking, but I am delighted to say that we have made considerable progress with the Potential Transaction and we now expect to be in a position to publish our Admission Document alongside our report and accounts by July 8.”