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SACOIL HOLDINGS LIMITED - Loan Settlement Agreement

Release Date: 08/04/2015 16:05:00      Code(s): SCL     
(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?)


SacOil is pleased to announce that it has entered into a
settlement agreement (the ?Settlement Agreement?) with Energy
Equity Resources Norway Limited (?EERNL?) relating to outstanding
loan amounts owing by EERNL and its subsidiaries (?EERNL Group?)to
the Company.

The EERNL Group?s loans originated from the joint participation in
Oil Prospecting Licence (?OPL?) 233 in Nigeria, whereby the
Company advanced funds on behalf of EERNL Group to secure the
participation interest in OPL 233.

In October 2011, the Company advanced US$5 million in loans to
EERNL (the ?Loans?) to fund the obligation of its subsidiary
EER 233 Nigeria Limited (?EER 233?) to pay a performance bond in
respect of OPL 233.

The Loans carried an interest rate of between 25% per annum and
32% per annum, with payment due in various instalments. The Loans
were secured in SacOil?s favour against EER 233's equity,
effectively giving the Company security over EER 233?s 20%
interest in OPL 233.

The EERNL Group has to date been unable to settle the amount
outstanding under the Loans, which amounts to approximately
US$24.2 million.

As at 31 August 2014, the Loans have not been impaired in SacOil?s
accounts as the value of the security notionally exceeds the
carrying value of the Loans. SacOil will provide a further update
with regard to the accounting treatment of the Loans in due

Further, pursuant to a farm-out agreement executed between SacOil,
EER 281 and TransCorp in relation to OPL 281, the Company advanced
funds on behalf of the EERNL Group to secure the farm-in into OPL
281. The total sum due to be repaid by TransCorp following
SacOil?s termination of its participation in the OPL 281 farm-in
can be paid directly into an account nominated by the EERNL Group.

In the light of the above, SacOil and EERNL have signed the
Settlement Agreement, the salient terms of which are set out

  -   In full and final settlement of any amounts advanced to the
      EERNL Group by SacOil in respect of OPL 281, EER 281 on
      behalf of the EERNL Group has nominated a SacOil bank
      account for the repayment of the full amount due from
      Transcorp. As previously announced, this will effectively
      return $12.5 million plus interest to SacOil.
  -   SacOil will indemnify EERNL Group against any and all costs
      incurred or sustained as a result of any counterclaims by
      Transcorp; in return, EERNL Group has ceded its rights to
      SacOil 281 relating to any claims that it has against

  OPL 233
  The repayment of the Loan relating to OPL 233 has been
  restructured as follows:
  - Interest freeze from 30 November 2014 on the outstanding
     Loan balance of US24.2 million;
  - EERNL Group's right to the US$ 2.25 million promote fee,
     payable by SacOil to EERNL Group upon receipt of government
     approval for the assignment of interest in OPL 233, is set
     off against the outstanding balance on the Loans;
  - Any and all proceeds subsequently received by EERNL Group
     through its involvement in OPL233 to be allocated to the
     repayment of the Loans;
  - If, at the time of first oil production from Oil Mining
     Licence   113(?OML  113?)   there   continues   to be  sums
     outstanding pursuant to the Loans, 50% of the net OML 113
     cash flow amounts - after providing for the debt service
     costs, capital expenditure and other operating costs
     relating to OML 113 - received by EERNL will be paid to
     SacOil semi-annually to reduce the outstanding Loans, up to
     US$ 5 million.

  - Terminates the Master Joint Venture Agreement between SacOil
     and EERNL, dated 24 September 2010, including all rights and
     obligations consequent thereto.

In conclusion, the Settlement Agreement restructures EERNL Group's
debt obligations to SacOil in exchange for SacOil's waiver of
certain rights and interests emanating from the Loans. However,
SacOil retains the existing security over EERNL Group?s 20%
interest in OPL 233.

Dr Thabo Kgogo, CEO of SacOil, commented, ?This settlement
reflects the restructuring of the loans advanced to the EERNL
Group and the consequences of our termination of the OPL 281
contract with Transcorp. It also brings an end to the Master Joint
Venture   Agreement  with   EERNL  with   regards   to the   joint
investigation of new exploration opportunities. This is in line
with our renewed focus on development and production assets.
Overall, we have negotiated this settlement to restructure the
EERNL Group's debt obligations and enhance our ability to recover
the sums owed to the Company and its shareholders.?
JSE Sponsor

PSG Capital Proprietary Limited

8 April 2015

For further information please contact:

SacOil Holdings Limited                   +27 (0)11 575 7232

finnCap Limited (Nominated Adviser and    +44 (0) 20 7220 0500
Christopher Raggett

FirstEnergy Capital (Financial Adviser    +44 (0) 20 7448 0200
and Joint Broker UK)
Travis Inlow

Instinctif Partners London (UK Investor   +44 (0)20 7457 2020
David Simonson / Anca Spiridon

Instinctif Partners Johannesburg (SA      +27 (0)11 447 3030
Investor Relations)
Nicholas Williams / Tshepo Mophiring

Date: 08/04/2015 04:05:00 Supplied by www.sharenet.co.za                     
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