Saturday, 18 July 2015

ACCUGAS GETS $445M LOAN FROM FIRSTBANK, FCMB, OTHERS

Report reaching the newsroom of Tectono Business & Politics has it that some commercial banks in Nigeria have granted $445 million syndicated Senior Debt Facility to Accugas Limited. The banks are:
·         FirstBank of Nigeria Limited
·         United Bank for Africa Plc
·         First City Monument Bank Limited (FCMB)
·         Union Bank of Nigeria Plc
·         Ecobank Nigeria Plc

We gathered that FCMB Capital Markets Limited, the investment banking subsidiary of FCMB Group Plc, facilitated the successful closure of the deal. It played the role of Joint Structuring Bank, Joint Mandated Lead Arranger and Technical Bank in the transaction. In its role as Joint Mandated Lead Arranger, it contributed significantly in the arranging the Facility.

Accugas Limited is a wholly-owned subsidiary of Seven Energy International Limited, an independent Nigerian integrated oil and gas exploration, development, production and gas distribution company. The agreement signing ceremony of the facility was held yesterday in Lagos.

According to Accugas Limited, the funds would be used to refinance its existing facilities and to support additional medium-term capital requirements. This will enable the company achieve its objective of satisfying the growing energy demands from power plants and industrial users in Nigeria.

An Executive Director of FCMB Capital Markets, Mr. Tolu Osinibi, while speaking after the agreement signing ceremony, expressed excitement on the successful closure of the deal and also commended Seven Energy for its ongoing and significant contributions to the development of Nigeria’s energy sector.

He said: “Aside from playing its part in ensuring the successful completion of the transaction, FCMB Capital Markets will continue to take seriously its commitments and responsibility as the Technical Bank. This role remains important towards ensuring that Accugas continues to realise its expansion plans, by adequately monitoring the various complex issues associated with the projects, on behalf of the syndicate of lenders.”

In his speech, the Chief Executive Officer of Seven Energy International Limited, Mr. Philip Ihenacho, thanked the team for the laudable work done to bring the capital raising exercise to a close.

He added: “The project financing deal is a milestone in the history of our company, especially as it demonstrates Banks’ confidence in the gas sector. For Nigeria to be able to develop domestic gas infrastructure to solve the problem of power sector in particular, we need to begin to mobilise capital to projects like this. We now have almost 300km of gas pipelines. Our company has a gas producing plant that is one of the largest in sub-sahara Africa with focus on domestic supply of gas.  We currently supply gas to some power plants. The backing of the banks has made this possible and we are very happy about this development.”

The Seven Energy boss identified inability to move the product to end users as the main challenges of gas exploration in the country.

In his own words: “There is a lot of discovered gas in Nigeria. The challenge is actually in terms of getting the gas to customers because unlike oil, where you can truck it or move easily, gas, can only be transported through pipelines or by liquefaction compressors.”