Petroleum Africa
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Wednesday, January 30, 2019
Sirius Petroleum is looking to raise funds for its Ororo field in Nigeria; the company signed a binding agreement for up to $20 million with Barak Fund SPC. The $20 million will be used to contribute to the funding of the first phase of the Ororo field development.
Sirius signed an agreement with Barak for the provision of a $20 million debt facility, which, subject to the satisfaction of all conditions thereto, can be drawn down in specified tranches following first production. The facility will be deployed to pay for costs in relation to Ororo-2 (following first oil) as well as Ororo-3, which are due to service providers under the staged milestone payments for the Ororo work program and marks an important step in developing the strategic, long-term partnership with Barak.
The facility has a term of three years from the date of the first drawdown and is repayable in four equal instalments of, if the facility is fully drawn, $5 million (plus accrued interest thereon) in the last four quarters of the term of the loan. Commencing from drawdown, interest is charged at three-month LIBOR plus 10% and is payable quarterly in arrears
Other key terms of the facility are that the facility may be cancelled, and the outstanding amounts of the loans declared immediately due and payable by Barak upon, among other things, a change of control of Sirius or on the disposal of all or substantially all of the assets of Sirius’ group. Sirius has given customary negative pledges, warranties, undertakings, events of default and indemnities to Barak. Sirius will grant Barak an all assets debenture and a security assignment of receivables by way of assignment of offtake contracts. Drawdown is conditional upon, among other things, the satisfaction of customary conditions precedent.
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