San Leon Energy PLC (AIM:SLE, AQSE:SLE, OTC:SLGYF) told investors it has been informed that Eroton Exploration and Production has signed a non-binding term sheet with Africa Import Export Bank for a prospective US$750mln senior secured reserve-based lending facility.
The AIM-quoted investor presently holds a 39.2% indirect economic interest in Eroton which is refinancing an existing US$196mln debt and acquiring an additional 18% interest in the OML 18 asset, in Nigeria, taking its holding to 45%.
"Eroton's new loan term sheet and its consequential proposed acquisition of an additional interest in OML 18 demonstrates the widespread and ongoing support for OML 18 as a world-class oil and gas asset,” said San Leon chief executive Oisin Fanning.
The deal comes as efforts continue to consolidate and restructure the ownership of San Leon’s interests in OML 18.
“We stand to be a further beneficiary of this following the conclusion of San Leon's proposed acquisition of 100% of MLPL,” Fanning added.
“Our advisers are continuing to work on the transaction documentation and Eroton's planned refinancing marks an important milestone. "
Presently, San Leon holds a 40% interest in the MLPL vehicle which in-turn owns 100% of Martwestern Energy which owns 98% of Eroton.
A transaction will see San Leon receive the remainder of MLPL to cover debt repayments due under a prior financing arrangement.
It is expected that San Leon will see its indirect interest in Eroton increase to 98% from 39.2%, meanwhile, its underlying interest in OML 18 will increase to 44.1% from 10.58%.
San Leon said that parties continue to work with their respective advisers to prepare the necessary transaction documentation in relation to the restructuring transaction, which will be classed as a reverse takeover under AIM rules.