Stanbic IBTC to provide N18bn facility for Eland Oil & Gas
Stanbic IBTC, working with its group brand, Standard Bank Group of South Africa, has partnered Eland Oil & Gas, West Africa with an initial focus on Nigeria, to provide a new accordion facility and increased borrowing base of $50m (about N18bn).
In a statement on Thursday, the bank said this was in line with its resolve to enhance business growth and expansion.
The facility is being underwritten by Stanbic IBTC Bank and Standard Bank, while Stanbic IBTC Capital Limited would act as a joint book runner, the statement said.
“An accordion facility is essentially an incremental facility, which allows a borrower to take an additional facility over and above what was originally agreed with the financier on the same terms as the original facility for expansion purposes,” the bank explained.
In November 2018, Eland Oil & Gas announced that it had successfully refinanced its existing reserve-based lending facility with a new five-year syndicated RBL facility in an amount of $75m, with the option to increase it to up to $200m through an accordion, subject to incremental production and reserves.
Speaking during the announcement, Stanbic IBTC said the deal was an opportunity to support Eland Oil & Gas’ business expansion drive in the oil and gas industry.
According to the financial institution, it will continue to leverage its excellent investment banking pedigree as well as the strength of its franchise in the Standard Bank Group, the largest financial institution in Africa, to consummate such big ticket deals that will not only help businesses grow but also help deepen key industries.
The oil and gas company announced that following a re-determination, the borrowing base amount increased from $103m to $134m and an initial accordion increase of $50m was being underwritten by Standard Bank of South Africa and Stanbic IBTC Bank Plc, resulting in the commitments under the facility increasing from $75m to $125m. Of the commitments, $50m was currently drawn, it added.
Chief Financial Officer, Eland Oil & Gas, Ron Bain, who spoke on the deal, said, “I am pleased to announce the large increase in borrowing base on our RBL facility, which demonstrates the hugely accretive quality of the new wells drilled on the OML 40 asset and the growth in value they bring to our shareholders.
“Since refinancing the RBL in 2018 into a longer-term facility, we have the flexibility to diversify the capital structure of the company leveraging our position comfortably within our debt parameters and lowering the overall cost of capital.” culled from punchng.com