Wrap Text
OAO - Oando Plc - Exile Resources Inc. and Oando announce proposed
acquisition and financing
Oando Plc
(Incorporated in Nigeria and registered as an external company in South
Africa)
Registration number: RC 6474
(External company registration number: 2005/038824/10)
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: OANDO
ISIN: NGOANDO00002
("Oando" or "the Company" or "the Group")
EXILE RESOURCES INC. AND OANDO ANNOUNCE PROPOSED ACQUISITION AND FINANCING
August 2, 2011 (Toronto, Ontario): Exile Resources Inc. ("Exile")
(TSXV:ERI) and Oando PLC ("Oando") (NSE: OANDO and JSE:OAO), a Nigerian
based integrated energy group, are pleased to announce that they have
entered into a term sheet dated July 28, 2011 providing for, subject to the
completion of satisfactory due diligence by both parties and other
conditions, the acquisition (the "Acquisition") by Exile of certain
interests of Oando in respect of Oil Mining Leases and Oil Prospecting
Licenses (the "Upstream Assets") in exchange for 100,000,000 post-
consolidation common shares in the capital of Exile ("Shares"). Oando is a
public limited liability company incorporated under the laws of the Federal
Republic of Nigeria ("Nigeria"). In 2010, according to its financial
statements for the year ended December 31, 2010 audited in accordance with
International Financial Reporting Standards, Oando generated total revenues
of US$2.55 billion, of which US$131 million was from its exploration and
production segment.
Oando`s interests in the Oil Mining Leases and Oil Prospecting Licenses are
held through direct and indirect subsidiaries located in Nigeria. The Oil
Mining Leases and Oil Prospecting Licenses are a combination of producing,
development and appraisal and exploration assets and are in respect of oil
fields located in onshore and offshore Nigeria (including the Niger Delta),
the Nigeria Sao Tome and Principe Joint Development Zone ("JDZ") and the
Exclusive Economic Zone ("EEZ") of Sao Tome and Principe.
"We are very excited about this proposed transaction with Oando to build the
leading indigenous upstream oil and gas company in Africa and believe this
will produce great value for our Exile shareholders" says Stan Bharti,
Exile`s Chairman.
The parties have agreed to negotiate exclusively with each other in good
faith and use their reasonable efforts to negotiate a definitive agreement
to give effect to the Acquisition (the "Definitive Agreement") on or prior
to September 30, 2011. The manner in which the Acquisition will be completed
will be determined after each party has had an opportunity to complete its
due diligence and consider all applicable tax, securities and other laws.
As a condition precedent to signing the Definitive Agreement, Oando shall be
satisfied that the Acquisition is structured to ensure that (i) each of the
Nigerian assets/companies comprising the Upstream Assets maintains its
status as an indigenous Nigerian company under Nigerian law in order to
maintain and/or secure indigenous fiscal terms and any other policies and
laws applicable to indigenous companies; and (ii) Oando achieves an optimal
result having regard to tax and regulatory concerns of Oando.
Exile and Oando are joint venture partners on Exile`s Akepo oil field
located in Nigeria. On January 5, 2009, Exile announced that it had entered
into an agreement with an affiliate of Oando whereby such affiliate was
permitted to acquire a 75 percent working interest in Exile`s 40 percent
interest in the Akepo field in return for funding Exile`s historical
expenses, and financing the future development expenditure of the project.
Under the terms of the agreement that is structured in two stages, the
affiliate of Oando is required to reimburse Exile`s historical expenses on
the Akepo field, and finance the further development of the project, in
return for acquiring 75 percent of Exile`s current economic interest in the
project. On January 20, 2009, Exile received US$1.0 million in compliance
with the terms of the agreement. On April 9, 2010, Exile received the final
tranche of the expected US$1.1 million to complete the equity transfer. One
final payment of approximately US$1.0 million is due at first oil, expected
to be Q4 2011. Exile retains a 17.5 percent economic interest in the Akepo
field after cost recovery by the affiliate of Oando, until 7.5 million
barrels of oil equivalent ("boe") have been recovered from the field. After
this, Exile`s interest will decline proportionally to 12.5 percent until 10
million boe have been recovered from the field, and to 10 percent
thereafter. During the cost recovery phase, Exile will be entitled to an 8
percent economic interest.
Exile and Oando are arm`s length parties as defined by the Toronto Stock
Exchange Venture Exchange ("TSXV") Listing Requirements, and there are no
current non-arm`s length parties of Exile which are insiders of Oando or
presently hold any direct or indirect beneficial interest in either Oando or
any of its assets other than pursuant to the joint venture described above.
There are currently no "control persons" (as defined by the applicable
regulations of the TSXV) of Oando.
Concurrently with the Acquisition and as a condition precedent to completion
of the Acquisition ("Completion"), Exile intends to, by way of plan of
arrangement (the "Plan of Arrangement") and subject to receipt of all
necessary approvals, change its name and effect a consolidation of its
outstanding Shares on a basis such that the current shareholders of Exile
shall receive in exchange for each 20 Shares currently held: (i) one post-
consolidation Share; and (ii) two share purchase warrants of Exile one of
which will be exercisable for one Share at a price of US$3.00 per Share for
a period of 12 months; and the second of which will be exercisable for one
Share at a price of US$4.00 per Share for a period of 24 months. The
parties have agreed that they may, subject to market conditions, complete a
financing on or prior to Completion pursuant to which purchasers will, in
effect, receive up to 20,000,000 Shares at a price of US$3.00 per Share for
aggregate proceeds of up to US$60 million (the "Financing", and together
with the Acquisition, the Plan of Arrangement and related transactions, the
"Restructuring").
While Oando commenced its operations in downstream petroleum products
marketing, since December 2003, the Oando group has comprised five companies
across the entire energy value chain. In 2005, Oando become the first
African company to obtain a secondary listing on the JSE Limited, which was
the first dual listing in Nigerian history. For more information about
Oando including current assets profile and detailed results, please visit
the website at www.oandoplc.com.
Exile is a Canada-based public company currently engaged in the exploration,
development and production of petroleum and natural gas in Turkey, Nigeria
and Zambia. For further details on the current exploration activities of
Exile, please refer to SEDAR at www.sedar.com. For further details
concerning Exile, including financial information, please refer to the
annual audited financial statements of Exile for the year ended August 31,
2010 as well as the unaudited interim financial statements of Exile for the
six month period ended February 28, 2011, together with the accompanying
management`s discussion and analysis for each such period, all available on
SEDAR at www.sedar.com.
Following the transaction, it is anticipated that Exile will continue to
operate in the oil and gas sector with a focus on the development of the
Upstream Assets, in an effort to enhance overall shareholder value.
Upon completion of the Restructuring and subject to receipt of all necessary
approvals, it is expected that (a) the existing management team of Exile
will be retained and assigned mutually acceptable roles and functions and,
as a condition precedent to Completion, Oando will have the right to appoint
members to the management team of Exile; (b) the board of directors of Exile
will be comprised of three nominees of Oando, two nominees of Exile and two
independent directors, and (c) Jubril Adewale Tinubu will be appointed as
the Chairman of Exile. This board and management composition has been
structured so as to integrate the expertise of experienced oil and gas
executives to manage Exile`s new Upstream Assets. Upon Completion, it is
expected that the management and directors of Exile who have been appointed
by Oando will receive an aggregate of 20 million options, each option
exercisable for one Share at a price of $3.00 per Share for a period of five
years and vesting pursuant to the terms of Exile`s stock option plan.
Mr. Jubril Adewale Tinubu is the Group Chief Executive of Oando PLC, having
been appointed to this position in June 2001.
Mr. Tinubu is a lawyer and has almost 20 years experience within the
Nigerian Oil and Gas Industry. He obtained a Bachelor of Laws (LL.B.)
degree from the University of Liverpool, England in 1988 and a Masters of
Laws (LL.M.) from the London School of Economics, England, in 1989.
Mr. Tinubu is a World Economic Forum `Global Young Leader` and was awarded
Africa`s `Business Leader of the Year` by the Africa Business Magazine and
the Commonwealth Business Council in June 2010 on the basis of his
contributions to the development of the African Oil and Gas industry.
Exile expects to apply to list its Shares on the Toronto Stock Exchange
("TSX") upon completion of the Restructuring.
Completion of the Restructuring is subject to a number of conditions,
including the approval of the TSXV and TSX, the completion of satisfactory
due diligence, the requisite regulatory approvals, and the requisite
majority approval of shareholders of Exile. The Restructuring cannot close
until the approval of shareholders of Exile and all required regulatory
approvals are obtained. There can be no assurance that the Restructuring
will be completed as proposed or at all. Investors are cautioned that,
except as disclosed in any management information circular or filing
statement to be prepared in connection with the Restructuring, any
information released or received with respect to the proposed Restructuring
may not be accurate or complete and should not be relied upon. Trading in
the securities of Exile should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Restructuring
and has neither approved nor disapproved the contents of this press release.
Sandton
August 2, 2011
JSE Sponsor
Macquarie First South Advisers (Pty) Limited.
For further information, please contact:
Exile Resources Inc.
Tony Henshaw, President and CEO
Exile Resources Inc.
+44 207 793 2594
Tony.henshaw@exileresources.com
David Feick
Investor Relations
+1 403 218 2839
dfeick@equicomgroup.com
www.Exileresources.com
Oando PLC
Jubril Adewale Tinubu, Group CEO
10th Floor,
2 Ajose Adeogun Street
Victoria Island,
Lagos, Nigeria
Tel: +234 (1) 2702400
jatinubu@oandoplc.com
Tokunboh Akindele
Investor Relations
10th Floor
2, Ajose Adeogun Street
Victoria Island
Lagos, Nigeria
Tel: +234 (1) 2601290-9, Ext 6396
aakindele@oandoplc.com
Forward-Looking Statements
Certain information set forth in this news release may contain forward-
looking statements that involve substantial known and unknown risks and
uncertainties. These forward-looking statements are subject to numerous
risks and uncertainties, certain of which are beyond the control of Exile
and Oando, including, but not limited to, the impact of general economic
conditions, industry conditions, dependence upon regulatory and shareholder
approvals, the execution of definitive documentation and the uncertainty of
obtaining additional financing. Readers are cautioned that the assumptions
used in the preparation of such information, although considered reasonable
at the time of preparation, may prove to be imprecise and, as such, undue
reliance should not be placed on forward-looking statements.
NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS
DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY
OR ACCURACY OF THIS RELEASE.
Date: 02/08/2011 15:00:02 Supplied by www.sharenet.co.za
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