Seven Energy, FBN Capital, FBN Bank (UK), Ecobank seal $170m financing deal

In what is a major mile¬stone towards expand¬ing its gas infrastructure assets in the country, particularly to ramp up gas supply to power plants, Seven Energy International Limited and its wholly-owned subsidiary, Accugas Limited, have closed a $170 million 5.5-year medium-term acquisition facility deal with FBN Bank (UK) Limited and Ecobank Nige¬ria Limited.

The facility, which part-finances the acquisition of the entire issued share capi¬tal of East Horizon Gas Com¬pany Limited (EHGC) for a total consideration of up to $250 million, was closed on Monday, March 31, 2014.

FBN Capital Limited acted as structuring bank, sole initial mandated lead arranger, financial model¬ling bank and global facil¬ity coordinator; Aluko & Oyebode acted as lenders legal counsel; Royal Haskon¬ing DHV Nederland BV represented the lenders on environmental/technical due diligence matters, and UUBO and Addleshaw God¬dard acted as the borrower’s local and international legal counsels, respectively.

EHGC, a gas distribution and marketing company, was established by Oando Plc with the intention of constructing and operating an 18-inch, 128km gas pipe¬line that connects with the Obigbo-ALSCON pipeline at Ukanafun to supply gas to an industrial off-taker located in Mfamosing, Cross River State, and to meet the needs of other industrial users in the Calabar region.

Seven Energy’s acquisition of EHGC is in line with its stra¬tegic plans to expand its gas infrastructure assets in the South East and Niger Delta.

Phillip Ihenacho, chief executive Officer, Seven En¬ergy, said: “This is a landmark transaction for us. We are delighted to expand our mid¬stream operations in Nigeria with this investment. It is a perfect fit to our strategy of investing in core midstream infrastructure assets in the South East region of the country. I would also like to thank the entire team for their achievement in bring¬ing this important financing transaction to a close.”

Through its assets and subsidiary, Accugas, Seven Energy has a number of infrastructure projects in the region, including a gas processing facility at the Uquo Field and a gas pipeline network, which will have the capability to supply gas in the Port Harcourt, Aba and Calabar areas.

Also, commenting on the transaction, Bruce Bur¬rows, chief financial officer, Seven Energy, commended the lenders, FBN Bank (UK) Limited and Ecobank Nige¬ria Limited, for their sup¬port, and in particular, their dedication to ensure that the completion of the EHGC ac¬quisition process was in line with the sponsors’ timetable. He also noted FBN Capital’s role, particularly in working closely with Seven Energy, the lenders and the various independent consultants in concluding the transaction.

Kayode Akinkugbe, managing director and chief executive officer of FBN Capital Limited, said: “FBN Capital is very proud of the instrumental role it played in assisting Seven Energy to structure and arrange the fi¬nancing for the acquisition.”

He further said that FBN Holdings Group feels a strong sense of responsibility to¬wards fostering growth in the power, gas pipeline and oil and gas sectors and will continue to deploy its ex¬tensive debt arranging ex¬perience and structuring expertise in executing robust transactions in record time.

“We appreciate the re¬sponsibility and trust Seven Energy has placed with FBN Capital to advise and arrange the financing for the acquisition of EHGC. FBN Capital remains committed to further strengthening this relationship and supporting Seven Energy in realising its various financing goals and objectives,” said Patrick Mgbenwelu, director and head, debt solutions, FBN Capital Limited.