Savannah Energy PLC (AIM:SAVE) said it has signed a share purchase agreement (SPA) with Cameroon's national oil company, Société Nationale Des Hydrocarbures (SNH), for the sale of 10% of the issued share capital in Cameroon Oil Transportation Company (COTCo).
Savannah's wholly-owned subsidiary, Savannah Midstream Investment, owns the shares in COTCo, which owns and operates the 903-kilometre Cameroon section of the Chad-Cameroon export pipeline, the Kome Kribi 1 floating storage and offloading facility, and related infrastructure.
In consideration for the sale of the shares, SNH will pay US$44.9mln to Savannah Midstream, which will be used for part repayment of existing debt facilities.
Under the terms of the SPA, SNH and Savannah Midstream have pledged their support for each other as shareholders in COTCo.
Savannah Energy expects the transaction to have a positive impact on its financial position and future investment opportunities in Africa.
Completion of the transaction is subject to certain conditions precedent related to amendments to the bylaws of COTCo and is expected to occur in the second half of 2023. Savannah Midstream will retain the right to the dividend attaching to COTCo shares until the date of payment of the consideration.
In a statement, Andrew Knott, CEO of Savannah Energy, commented: "We are pleased to have reached this agreement with SNH. This transaction is in line with our strategy to monetise our interest in COTCo and to reduce our net debt position. We believe it is a positive step towards unlocking the value in our portfolio and delivering Projects that Matter in Africa."