Savannah Petroleum targets Seven Energy in reverse takeover

Ladol

Savannah Petroleum said it is targeting Nigeria-focused Seven Energy International PLC in a reverse takeover deal that is already in the negotiation stage.

Savannah Petroleum said in a statement noting recent media speculation regarding the identity of the West African focused business with which it has entered into a binding exclusivity agreement, Savannah said it will “provide further updates in due course and continues to seek to complete the Proposed Transaction on an accelerated timescale.”

By reverse takeover, it is a type of merger that private companies use become publicly traded without resorting to an initial public offering (IPO).

Seven Energy has commented on the deal. However, the company had in recent times drafted the ‘wrath’ of rating agencies.

Early this month Fitch Ratings downgraded Nigeria-based Seven Energy’s Long-Term Issuer Default Rating to ‘RD’ from ‘C’.

In the hierarchy of its ratings, ‘C’ is a junk status that is below investment grade. According to Fitch, its means- highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations.

The rating agency also simultaneously affirmed the wholly owned subsidiary Seven Energy Finance Limited’s USD300 million 10.25% senior secured notes due 2021 at ‘C’ with an ‘RR6’ Recovery Rating.

It would be recalled that Fitch had downgraded in early May as the company had defaulted in paying its loans.

Seven Energy was fouded in 2014, with upstream oil and gas interests in the region supplying gas to the power generation and manufacturing industries, principally through its own integrated processing and pipeline infrastructure, and the backing of strategic long-term investors, the Group has a unique focus on the emerging Nigerian domestic gas market. The Group’s midstream gas infrastructure assets, focused in the south east Niger Delta, include the 200 MMcfpd Uquo gas processing facility and a gas pipeline network of 260 km with distribution capacity of 600 MMcfpd. Its upstream assets include licence interests in the Uquo Field and the Stubb Creek Field (south east Niger Delta), an indirect interest in OMLs 4, 38 & 41 through a Strategic Alliance Agreement with Nigerian Petroleum Development Company (north west Niger Delta) and licence interests in OPLs 905, 907 and 917 (Anambra Basin). The Group has its main offices located in Lagos and London.

Seven Energy Finance Limited is a wholly owned subsidiary of Seven Energy International Limited incorporated in the British Virgin Islands. The Company is the issuer of US$300 million 10.25% Senior Secured Loan Notes due 2021 and the US$100 million 10.50% Senior Secured Notes due 2021, both of which are listed on the Irish Stock Exchange.