Funding shortfall delays oil and gas transaction
LAGOS, (CAJ News) – MART Resources, the Canadian firm, has announced it had given Delta Oil Nigeria additional time to raise some CAD$124,92 million (some N18,7 billion) to complete the transaction between the two companies.
Delta is providing significant equity to the proposed purchase of Mart’s common shares pursuant to the proposed plan of arrangement but has been sourcing funding for a portion of the purchase price from traditional bank financing.
However, as most of Mart’s free cash flow is currently being applied towards servicing bank debt due to the depressed oil price, Delta has advised that additional bank funding cannot be obtained until there is an increase in oil price or a change to Mart’s borrowing terms.
“Accordingly, Delta will seek alternative sources of funds that will not require debt servicing to satisfy the Financing Condition,” Mart stated on Thursday.
The consideration to be paid to Mart shareholders remains unchanged at CAD$0,35 for each Mart common share held for aggregate consideration for all of Mart’s current shares.Mart is an independent international oil and gas company focused on production and development opportunities in the Niger Delta region ofNigeria.
-– CAJ News
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