The acquisition of Exxon Mobil shares by Seplat Energy Offshore Limited has now been fully approved by President Muhammadu Buhari in his capacity as Minister of Petroleum Resources.
According to a statement by Special Adviser to the President on Media and Publicity, Femi Adesina, the consent is also in consonance with the country’s drive for Foreign Direct Investment (FDI) in the energy sector.
Buhari explained that Exxon Mobil had entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.
Seplat Energy Plc had unveiled its plans to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation Delaware (USA Incorporated).
Confirming the deal, Chief Financial Officer, Seplat, Emeka Onwuka said the arrangements have reached advanced stage while completion of the transaction is subject to ministerial consent and other required regulatory approvals.
According to the transaction summary, Seplat Energy Offshore Limited, a wholly owned Nigerian subsidiary of Seplat Energy Plc, had entered into a sale and purchase agreement to acquire the entire share capital of MPNU for a purchase price of $1.283 million plus up to $300 million contingent consideration, subject to lockbox, working capital and other adjustments at closing relative to the effective date.
Seplat said the buy-over does not include ExxonMobil’s deep-water assets in Nigeria.
It stated that the transaction would create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy’s ability to drive increased growth, profitability and overall stakeholder prosperity.
Seplat said the cash consideration payable under the transaction will be funded through a combination of existing cash resources and credit facilities of Seplat Energy, and a new $550 million senior term loan facility and $275 million junior off take facility.
According to the agreement, the transaction will not result in any changes to the Board of Seplat Energy. The company currently expects the transaction to close in second half of 2022.
Seplat Energy Plc reported a rise of 238% in its half year 2022 profit before tax (PBT) to $209.9 million from $62.1 million year-on-year. The company also maintained a strong balance sheet with $350 million cash at bank.