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Seplat refinances $300m debt with new facility

Seplat refinances $300m debt with new facility

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 ’Femi Asu

Seplat Petroleum Development Company Plc, a Nigerian indigenous oil and gas company, said it had successfully refinanced its existing $300m revolving credit facility due December 2018 with a new four-year $300m facility due June 2022.

The RCF carries an initial interest of Libor +6 per cent payable semi-annually.

In conjunction with the issuance of the $350m 9.25 per cent senior notes due 2023 (the “Notes”), the pricing of which was announced separately on Tuesday, the company envisages its pro forma gross debt post-closing of both the notes and the RCF (expected to occur on March 21, 2018) will be $550m.

The proceeds from the notes and the RCF would be used to repay and cancel existing indebtedness.

The Seplat’s Chief Financial Officer, Roger Brown, said, “This successful refinancing reflects the confidence that the market has continued to show in our business and ability to proactively manage our balance sheet even with challenging times.

“Our debut bond issuance further diversifies our capital base and along with the new RCF strengthens our liquidity position which will allow us to scale up our work programme and focus on delivering our growth strategy.”

Seplat returned to profitability last year after making a loss before tax of $173m in 2016 on the back of production disruption and fall in global oil prices.

The firm, which announced its full-year 2017 financial results late last month, said higher oil production, following the lifting of force majeure on the Forcados terminal from June 6, 2016 onwards, together with higher oil price realisation, positively impacted on its oil revenue, which increased by 121 per cent year-on-year to $328m.

Its Chief Executive Officer, Mr. Austin Avuru, said the company would retain the flexibility and financial discipline that had seen it emerge from a difficult chapter in its history a fitter and stronger business.

“With line of sight on the availability of multiple export routes, we aim to significantly de-risk distribution of oil production to market,” he said.

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