DEAL DIARY: Energy & Resources Deals EAST HORIZON GAS COMPANY LIMITED
ENERGY & RESOURCES
Seven Energy Ltd, a wholly-owned subsidiary of Seven Energy International Ltd (SEIL), the integrated oil and gas development, production and gas distribution company with interests in Nigeria, announced in April that SEIL had completed the acquisition of the entire issued share capital of East Horizon Gas Company Limited (EHGC) for a total consideration of up to US$250m. This acquisition enhances Seven Energy’s position as a leading gas marketing and distribution company in south east Nigeria, expanding the reach of its gas pipeline network in this growing market to over 260km, diversifying its customer base across key sectors of the Nigerian economy and increasing longterm contracted gas sales volumes to 200 MMcfpd.
NEW CLYDESDALE COLLIERY Universal Coal is to acquire all assets of Exxaro Resources and assume liabilities of Exxaro’s New Clydesdale colliery in a move that will transform the company into a multi-mine producer. Universal Coal Chief Executive Officer, Tony Weber, stated that the acquisition of the NCC marked a “major step forward” to becoming a mid-tier coal producer, and expedited the development of the company’s second operation immediately on the heels of commissioning its Kangala mine. Kangala is to produce 2.1-million tonnes a year of thermal coal in the first half of 2014.
FBN Capital Ltd was brought in by Accugas Ltd (Seven Energy’s midstream business) in 2013 to act as the Mandated Lead Arranger in the structuring and raising of a US$170m acquisition finance facility (Accugas III). The facility was used to part-finance SEIL’s acquisition in April of a 100% shareholding in EHGC.
“Our Roodekop deposit contains an 84-milliontonne coal resource, 82.9-million tonnes of which is measured and is awaiting only the granting of a water use licence before development activities can commence,” said Weber.
FBN Capital leveraged on its strong relationships with financiers and broad understanding of the market dynamics in structuring the deal and was successful in raising the funds from a group of four banks.
He added that in combination with NCC’s established operation and infrastructure, the path forward to bringing the Roodekop mine on stream had been fast-tracked.
Patrick Mgbenwelu, Director and Head of Debt Solutions, led the team at FBN Capital, supervising team members and all deliverables to ensure a timely financial close. Seke Adelaja worked on this transaction from the onset, and was Patrick Mgbenwelu instrumental in getting the information memorandum completed, managing the appointment of the various lender consultants, responding to queries raised by the banks and managing the development of the financial model. Moshood Abolade provided invaluable input in the modelling workstream and explained key structural aspects of the foregoing to the lenders’ credit committee members.
The NCC has one of the oldest mines in the country, and has been operational, sporadically, since 1949.
SEVEN ENERGY LIMITED ACQUIRES
EAST HORIZON GAS COMPANY LIMITED DRV Corporate Finance Structuring Bank, Mandated Lead Arranger, Financial Modelling Bank and Global Facility Coordinator
Alexis Fox-Mills, of Merrill DataSite, acted as virtual data room provider, whilst Rand Merchant Bank and EOH Legal Services acted as financial adviser and legal adviser to the vendor respectively. Cliff MacGregor led the team at EOH, and Pieter Nienaber headed the team at Rand Merchant.
UNIVERAL ACQUIRES
NEW CLYDESDALE COLLIERY DRV Corporate Finance Virtual Data Room Provider
NOVUS ENERGY INC Novus Energy Inc. (TSXV: NVS) announce that the previously announced acquisition of the Company by Yanchang Petroleum International Limited (“Yanchang Petroleum International”) through its indirect wholly-owned subsidiary, Yanchang International (Canada) Limited, pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”) has been completed. Pursuant to the Arrangement, Novus shareholders will receive C$1.18 in cash per common share of Novus. Mr. Hugh G. Ross, President and Chief Executive Officer of Novus, stated “The Novus team is excited about our future with Yanchang Petroleum International and I would like to personally extend my sincere thanks to our board members and staff for their dedication, hard work and contribution which has made the completion of the Arrangement possible”. Cormark Securities Inc., as lead, and FirstEnergy Capital Corp. acted as financial advisers to Novus in the transaction. GMP Securities L.P. acted as special adviser to the Special Committee of the Novus board of directors, and Canaccord Genuity Corp. and Haywood Securities Inc. acted as strategic advisers to Novus. Blake, Cassels & Graydon LLP acted as legal counsel to Novus. With the completion of the Arrangement, the common shares of Novus are expected to be de-listed from the TSX Venture Exchange in a few trading days.
YANCHANG PETROLEUM INTERNATIONAL
ACQUISITION NOVUS ENERGY INC DRV CorporateOFFinance Financial Adviser to the Vendor
Lenders Legal Adviser to the Vendor Legal Adviser to the Purchaser Lenders’ Legal Counsel
Templars
Borrower’s Legal Counsel Financial Adviser to the Vendor Borrower’s International Legal Counsel
Lender’s Technical Consultant
Collateral Agent
100 | Acquisition International | June 2014
Financial Adviser to the Purchaser