British independent oil company, Savannah Petroleum, focused around activities in Niger and Nigeria, has entered into an implementation agreement with Seven Energy.
Implementation agreement is legally binding and details the legal terms and steps according to which the acquisition of the Seven Assets, as initially detailed in the Company’s AIM Admission Document dated 21 December 2017 and as amended by the Company’s RNS’s of 20 September 2018 and 21 December 2018, will be implemented. The Implementation agreement includes various agreed legal documents required to complete the transaction, and also includes provisions which commit the parties to support and deliver the transaction including the restructuring of Seven Group.
As a result of signing the implementation agreement, Savannah has agreed to provide further liquidity to the Seven Group during the restructuring period by way of an increase in the size of the liquidity facility to up to US$28m. The liquidity facility is a super senior secured revolving credit facility of an initial US$20m and was put in place in November 2017 alongside the signature of the lock-up agreement. Certain advisory fees incurred by the Seven Group which become payable upon signature of the implementation agreement are expected to be funded through the increased liquidity facility.
Progress has been made in relation to the remaining transaction work streams, including, inter alia, the receipt of ministerial consent. The Company continues to expect that the transaction will complete during Q1 2019.
Signing of the implementation agreement is an important milestone in the Seven Energy transaction moving closer to concluding transformational acquisition. The remaining legal and procedural transaction work streams are subject to a pre-agreed sequence of events which will commence.
As part of the agreement plan, it was noted that whilst vast majority of steps detailed in the implementation agreement are procedural, the cooperation of certain third parties will be required to implement transaction which the company is confident will be forthcoming.