Respite may have come the way of investors who were previously concerned with the long-term viability of Seven Energy International Limited, a leading integrated gas company operating in South East Nigeria, and its wholly owned subsidiary, Accugas Limited.
The growth fundamentals and business model of the energy firm were questioned recently by analysts following a downgrade of the company by Fitch, a foremost credit rating agency to a risk status.
“Our Accugas business has recently achieved a key milestone – we have completed a further extension of our gas network so that we are now able to deliver gas through a gas ring that is over 300 kilometres long, which provides added redundancy and security of supply for our customers,” Phillip Ihenacho, CEO, Seven Energy, said in Lagos during the event to mark the finalisation of the re-profiling of the principal amortisation of its $445 million Accugas IV Facility and the launch, by its subsidiary, Seven Energy Finance Limited, of a consent solicitation process for capitalisation of interest on its $400 million Senior Secured Notes.
“This involved the commitment of another $100 million of capital to complete the construction. We now have a robust pipeline network capable of delivering up to 600 million standard cubic feet of gas per day into the Calabar, Aba and Port Harcourt areas. This is all thanks to the unwavering support of both our lenders and our shareholders. As I have said before, Seven Energy remains committed to the gas industry in Nigeria,” the CEO said.
Patrick Mgbenwelu, director/head of Debt Solutions at FBN Merchant Bank Limited, said: “We are pleased to have secured the unanimous approval of the Accugas lenders for this rescheduling, which evidences the continued strong support of the lenders for this facility and the good understanding which the lenders have about the Seven Energy and Accugas business model and growth fundamentals, which has evolved and performed since its initial inception in 2010.”
In a statement issued by the company in Lagos Monday, the company stated, “Further to our recent updates, Seven Energy is pleased to announce that it has completed the final documentation with its Accugas IV Facility lenders to revise the amortisation profile of the Accugas IV Facility, reducing its near term debt service obligations in 2016 and 2017.
“Further, in order to strengthen its near term liquidity, Seven Energy Finance Ltd. announced on 27th October 2016 that it had launched a consent solicitation to allow for the capitalisation of interest on its $400 million Senior Secured Notes, at the company’s option, by increasing the principal amount of the outstanding Notes, beginning with the 11 October 2016 interest payment date and for up to the following three interest payment dates, namely 11 April 2017, October 11, 2017 and April 11, 2018.
“As at 27th October 2016, 82% of the holders of the Senior Secured Notes had agreed to the proposed amendment.”
Commenting on the development, Bruce Burrows, chief financial officer, Seven Energy, said, “We would like to thank the Accugas lenders, and our long standing facility arranger, FBN Merchant Bank Limited, for their continued support.
“The Accugas Facility, which is currently drawn to $375 million, has grown with Accugas and has supported and enabled the expansion of the company’s activities since the first Accugas facility was put in place in 2010.”
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