Seplat to invest $408m in oil asset acquisition

Seplat Petroleum Development Co. Plc, SPDC, is set to invest $408 million in oil asset re-negotiations after several attempt. The company which is a major indigenous oil and gas firm in the country said it has reached an agreement to release the funds from an escrow account which was set up with a consortium of banks to make a potential acquisition.
According to the firm, the escrow account was originally set up with the consortium in order to look for opportunities to buy assets from oil and gas companies operating in the region. Based on the new agreement, SEPLAT has agreed to release $408 million of the total $453 million held in the escrow account.
The company said, “There have been material delays with the underlying acquisition, prompting SEPLAT to reach agreement with the consortium for release of the escrow amount,” it said in a statement.

 
The remaining $45 million will remain as a deposit in the escrow account, as negotiations about acquiring the unnamed asset have recommenced.
“Certain recent events have led to the restart of negotiations by the consortium to secure the asset, and SEPLAT continues to work with them,” it said.
Following the release of the $408 million from the existing escrow account, SEPLAT has placed $29 million of those funds in a new escrow account pending the final terms of the acquisition. And after the amendments and money transfers, SEPLAT has access to $368 million of the $453 million that was originally held in the escrow account.
If no acquisition is made, the funds held in the escrow account will be returned to SEPLAT, but if the company chooses not to progress with the acquisition, it will need to pay $20 million to the other consortium members but the remaining funds in the escrow account would be returned to SEPLAT.
SEPLAT has also agreed to pay a portion of previously incurred consortium costs related to the potential acquisition, totaling $11 million. This will be paid in two instalments, with the first $3.5 million paid immediately and the remaining balance to be paid on a deferred basis, it said.
Earlier this year, SEPLAT was in talks with AfrenPlc, the embattled Nigeria-focused oil and gas company, over a potential takeover offer.