Seplat Petroleum Development Company (Seplat) has restarted negotiations to acquire an asset in Nigeria’s Niger Delta, a deal in which it had previously faced delays
Due to confidentiality clauses in the deal negotiations, the asset in the Niger Delta, the seller and other members of the buyers' consortium have all not been named. The resumption of negotiations has also been attributed by the company to “certain recent events”.
The Nigerian oil and gas company said it had reached an agreement to release the funds from an escrow account which was set up with a consortium of banks to make a potential acquisition. According to the company, the escrow account was originally set up with a consortium of unnamed companies in order to look for opportunities to buy assets from oil and gas companies operating in the region. Seplat has agreed to release US$408mn of the total US$453mn held in the escrow account.
“There have been material delays with the underlying acquisition, prompting Seplat to reach agreement with the consortium for release of the escrow amount,” said a company statement.
The remaining US$45mn will remain as a deposit in the escrow account, as negotiations about acquiring the unnamed asset have recommenced.
Of the US$408mn released from the existing escrow account, Seplat has placed US$29mn in a new escrow account pending the final terms of the acquisition, leaving the company with access to US$368mn of the US$453mn that was originally held in the escrow account.
If no acquisition is made, the funds held in the escrow account will be returned to Seplat but if the company chooses not to progress with the acquisition, it will need to pay US$20mn to the other consortium members.
The oil company has also agreed to pay US$11mn, a portion of previously incurred consortium costs related to the potential acquisition. This will be paid in two instalments, with the first US$3.5mn paid immediately and the balance to be paid on a deferred basis.
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