Westport Oil Limited, a subsidiary of Seplat Energy Limited, has secured a $50 million offtake linked reserved based lending facility due April 2027.
The Offtake Facility is subordinated to the $110 million senior reserve based lending facility (the ‘’RBL’’). It attracts an initial interest of Libor +10.5% payable semi-annually and is scheduled to commence repayment from March 2023.
Affirming this, a notice signed by the Chief Financial Officer of Seplat, Mr Emeka Onwuka read: ‘’ Seplat Energy Plc (“Seplat” or the “Company”), a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, announces that its wholly owned subsidiary, Westport Oil Limited, has successfully raised a US$50 million offtake linked reserved based lending facility due April 2027 (the “Offtake Facility”). The Offtake Facility is subordinated to the US$110 million senior reserve based lending facility (the “RBL”). The Offtake Facility carries initial interest of Libor + 10.5% payable semi-annually and is scheduled to commence repayment from March 2023.’’
What you should know:
- An offtake agreement is an arrangement between a producer and a buyer to purchase or sell portions of the producer’s yet-to-be-manufactured goods. It is usually negotiated in advance and it helps buyers lock in price, while guaranteeing supply of a product. One of the advantages of this agreement is that it grants producers easy access to finance.
- Westport Oil Limited had earlier refinanced its existing $100 million reserve-based lending (RBL) facility due November 2023, with a new five-year $100 million reserve-based lending (RBL) facility due March 2026.
- The RBL carries initial interest of Libor +8% payable semi-annually and is scheduled to commence repayment from March 2023. It also includes a $75 million accordion to accommodate further commitments in the future.