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Sacoil Holdings Limited - Conversion Of Gairloch Debt To Equity Encha Energy Acknowledgement Of Debt To Sacoil Appointments To The Board

Release Date: 10/04/2013 08:01:00      Code(s): SCL     
SACOIL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE share code: SCL AIM share code: SAC
ISIN: ZAE000127460
(?SacOil? or the "Company?)

                                 Conversion of Gairloch debt to equity
                            Encha Energy acknowledgement of debt to SacOil
                              Encha Energy services agreement with SacOil
                                 Proposed appointments to the Board

1. Introduction

SacOil, the African independent upstream oil and gas company, is pleased to announce that it has
concluded an agreement dated 5 April 2013 (the ?Agreement?) with Gairloch Limited (?Gairloch?) for the
conversion of US$17.6 million of debt and accrued interest provided by Gairloch to equity in SacOil by 31
May 2013 (the ?Specific Issue?), thereby leaving SacOil debt free, reducing financing costs and significantly
improving its balance sheet position.

Furthermore, the Company has entered into the following agreements dated 28 February 2013 with Encha
Energy Proprietary Limited (?Encha Energy?), whose associates have a 20.67% shareholding in SacOil:
    a) an acknowledgement of debt (?Acknowledgment of Debt?) in terms of which, subject to the
       fulfilment of a suspensive condition, Encha Energy acknowledges its indebtedness to SacOil in the
       amount of R75 million; and
    b) a services agreement (the "Services Agreement?) in terms of which, subject to the fulfilment of
       certain suspensive conditions, Encha Energy undertakes to provide certain services to SacOil.

2. Details of the Specific Issue

SacOil will issue 488,804,476 new ordinary shares of no par value (?Shares?) to nominees of Gairloch at a
price of R0.32037 (approximately US$0.036) per Share (the ?Issue Price?), raising R156.6 million
(approximately US$17.6million) which will be applied to the satisfaction of SacOil?s entire indebtedness to
Gairloch. The Issue Price represents a 0.6% premium to the volume weighted average traded price of the
SacOil shares on the JSE Limited (the ?JSE?) over the 30 business days prior to the date of the Agreement.

On completion of the Specific Issue, Gairloch will hold a 33.89% indirect interest in SacOil. Gairloch is
expected to be a long-term investor in the Company.

The Agreement is subject to the fulfilment of the following conditions precedent by no later than 31 May
2013, or such later date as the parties may agree in writing:
   a) the approval of the Specific Issue by SacOil?s shareholders;
   b) the approval of the JSE and the AIM Market of the London Stock Exchange (?AIM?) for the
        admission of the Shares to trading on those markets;
   c) all other regulatory consents and approvals (including, without limitation, the approval of the
        Financial Surveillance Department of the South African Reserve Bank) required for the
        implementation of the Specific Issue.
Based on SacOil?s published interim results for the six months ended 31 August 2012, the unaudited pro
forma financial effects of the Specific Issue on SacOil?s reported loss per share (?LPS?), headline loss per
share (?HLPS?), net asset value per share (?NAV?) and tangible net asset value per share (?TNAV?) is set out
below.


The unaudited pro forma financial information is presented for illustrative purposes only, and, because of
its nature, it may not give a fair presentation of SacOil?s financial position, changes in equity, results of
operations or cash flows. The financial information is the responsibility of the board of directors of SacOil.


                                     Interim  Issue of shares         Before the                              After the     Change
                                   financial      ? Yorkville   Specific Issue(1)    Adjustments(2)    Specific Issue(3)     (%)(4)
Details                              results         Advisors

LPS/EPS (cents)                        (1.64)           0.07              (1.57)             2.22                  0.65    (141.28)
HLPS/HEPS (cents)                      (2.62)           0.11              (2.51)             2.57                  0.06    (102.40)
NAV per share (cents)                  45.89           (6.31)             39.58             (2.62)                36.96      (6.62)
TNAV per share (cents)                 31.11           (5.76)             25.35              2.20                 27.55       8.70
Number of shares in issue        918 268 379      35 072 412        953 340 791       488 804 476         1 442 145 267      51.27
(?000)
Weighted number of shares in     771 061 757      35 072 412        806 134 169       488 804 476         1 294 938 645      60.64
issue (?000)

Notes:

    1. The ?Before the Specific Issue? financial information has been extracted from SacOil?s historical published interim
       results for the six months ended 31 August 2012. These figures have been adjusted for the specific issue of
       shares to Yorkville Advisers as outlined in the announcement dated 1 November 2012.

    2. The LPS/EPS and HLPS/HEPS figures are based on the assumption that the Specific Issue was implemented on
       1 March 2012 for statement of comprehensive income purposes. NAV and TNAV are based on the assumption
       that the Specific Issue was implemented on 31 August 2012 for statement of financial position purposes.

    3. The ?After the Specific Issue? assumes all adjustments detailed in note (2) above.

    4. Measured as the ?After the Specific Issue? column as a percentage of the ?Before the Specific Issue? column.

3. Details of the Acknowledgment of Debt and Services Agreement

Included in ?Trade and Other Receivables? in the Company?s published interim results for the six months
ended 31 August 2012 is an amount of R75 million relating to an Advance Against Asset Negotiation Rights.
The Company has concluded the Acknowledgment of Debt with Encha Energy in terms of which, subject to
the suspensive condition that the Services Agreement has been duly executed and has become
unconditional, Encha Energy acknowledges its indebtedness to SacOil in the amount of R75 million with
effect from 28 February 2013.

Encha Energy?s acknowledgement of indebtedness is secured by a deed of suretyship (the "Suretyship?)
executed by Encha Group Limited (?Encha?) in favour of SacOil on 28 February 2013 in terms of which
Encha binds itself as surety for, and co-principal debtor with, Encha Energy for the payment obligations of
Encha Energy to SacOil under the Acknowledgement of Debt. Encha Energy has undertaken to effect
repayment of the debt to SacOil by no later than 28 February 2016.

4. The JSE Listings Requirements

The Specific Issue is classified as a specific issue of shares for cash in terms of the JSE Listings Requirements
and, as such, requires the approval of SacOil?s shareholders. In addition, the Services Agreement, is subject
to approval by SacOil shareholders in accordance with King III code on corporate governance. A circular
providing the details of the Specific Issue and the Acknowledgement of Debt and Services Agreement will
be issued as soon as practicable, but no later than 60 days after the publication of this announcement, in
order to expedite the process and minimize associated costs.

5. Proposed appointments to the Board

On completion of the Specific Issue, SacOil intends to appoint two new independent non?executive
directors to its Board - Mr Danladi Verheijen and Ms Lola Akinleye.

Danladi Verheijen is the Managing Director of Verod Capital Management Limited (?Verod?), a West Africa
focused investment firm, which he co-founded in 2008. Verod invests in high growth, medium sized
companies across several sectors, including consumer products, manufacturing, technology/media and real
estate. He previously was a Vice President at Citibank Nigeria where he led corporate finance and
investment banking transactions. He also had responsibility over Citibank?s equity investment portfolio and
represented the bank on the investment and advisory committee of Nigeria?s largest private equity firm.
Prior to that, he held roles at Ocean and Oil Holdings and at McKinsey & Company. He has an MBA from
Harvard Business School, an M.Sc in Engineering Economic Systems & Operations Research from Stanford
University and a B.Sc in Electrical Engineering from Calvin College. He is a Director at a number of
companies and he serves on the Boards of the Harvard Business School Association of Nigeria and Christian
Care for Widows and the Aged.

Lola Akinleye has over 15 years finance and investment banking experience with significant experience in
corporate finance advisory, equity and debt capital raising, structured and project finance and with public-
private partnerships for the development of infrastructure. She began her career at General Electric in
London and has held roles at JP Morgan, ARM Investment Managers and Zenith Capital. She has a BA in
Economics from the University of Nottingham and also an MA in Information Technology from the same
institution.

Mr Verheijen is a shareholder of Verod whose subsidiary has an 80% beneficial interest in Newdel Holdings
Limited which in turn is one of Gairloch?s nominee shareholders with 134,224,317 SacOil shares to be
issued to it. Further disclosures regarding Mr Verheijen and Ms Akinleye will be made upon finalisation of
their appointments.

Commenting, Robin Vela, CEO of SacOil, said:
?Converting the Gairloch debt to equity will leave the Company debt free, which not only reduces costs but
also greatly strengthens the balance sheet. Gairloch also brings to SacOil a strong and long-term
shareholder, who understands the region we operate in well and will support the ongoing growth of the
business towards first production and beyond. The addition to the board of Danladi and Lola will transform
the SacOil board making it Pan-African comprising individuals with experience and leadership roles in the
key Nigerian capital market?.


10 April 2013
ENDS
JSE Sponsor
Nedbank Capital

For further information please contact:

finnCap Limited (Nominated Adviser and Broker)   +44 (0) 20 7220 0500
Matthew Robinson / Christopher Raggett

FirstEnergy Capital (Joint Broker UK)            +44 (0) 20 7448 0200
Majid Shafiq
Travis Inlow

GMP Securities Europe LLP (Joint Broker UK)      +44 (0) 20 7647 2800
James Pope
Chris Beltgens

Keyter Rech Investor Solutions (SA)
Vanessa Ingram                                   +27 (0) 11 447 2993
Lynne Bothma

Pelham Bell Pottinger (UK)
Philip Dennis                                    +44 (0) 20 7861 3919
Nick Lambert                                     +44 (0) 20 7861 3936
Rollo Crichton-Stuart                            +44 (0) 20 7861 3918

Date: 10/04/2013 08:01:00 Supplied by www.sharenet.co.za                     
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