San Leon Energy, the Africa-focused oil and gas explorer led by former stockbroker and telecoms entrepreneur Oisín Fanning, is in talks to secure a backup investor as it experiences severe delays in securing initial funds from a US investment house that committed up to $187 million (€171 million) in October.
New York-based Tri Ri Asset Management (TRAM) had pledged the “transformative” finance package by way of investing in convertible loans, shares and warrants to Dublin-based but UK-listed San Leon.
However, while San Leon said on November 2nd that TRAM had confirmed that it was transferring $125 million of funds – covering the convertible loan element of the deal – the funds have yet to land in the Irish company’s account.
San Leon said on Monday that although it “has continued its dialogue with TRAM to understand the reasons for the delay”, the company is now in talks with an unnamed alternative finance provider.
“Although San Leon considers that its contract with TRAM remains valid and in full force and effect, the board has nevertheless determined that it is prudent to seek an alternative solution should the TRAM investment delays continue,” it said.
“Over the past weeks the company has identified and has been in discussions with a new potential financing partner in relation to a potential funding solution that is similar to the investment from TRAM.”
The refinancing is aimed at allowing San Leon take a controlling stake in Energy Link Infrastructure (Malta), or ELI, a provider of crude oil transport and storage systems within the Niger Delta area of Nigeria, as well as certain other assets.
[ Oisín Fanning may need fresh San Leon plan as US funds fail to turn upOpens in new window ]
San Leon owns a 10 per cent stake in a large Nigerian offshore oilfield, known as OML 18, which it acquired in 2016 in a complicated deal through a Mauritius vehicle called Midwestern Leon Petroleum Ltd (MLPL).
The Irish company has been the subject of a number of abandoned corporate events since then.
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San Leon was the subject of two failed takeover approaches in 2017 by Chinese suitors.
Early last year, San Leon unveiled plans to take over certain assets of Nigeria’s Midwestern Oil & Gas Company, which is a 13 per cent shareholder in San Leon, by way of a reverse takeover.
That deal was to increase San Leon’s indirect OML 18 stake to more than 44.1 per cent. It was also to involve Midwestern transferring its stake in ELI to San Leon.
However, drift in getting a loan facility over the line – contributing to delays in San Leon’s 2022 accounts and its shares being suspended in July – resulted in that plan being scrapped in October. It was immediately followed by the TRAM investment announcement to allow San Leon to pursue the latest planned deal.
San Leon said in its statement on Monday that it plans to publish its delayed 2022 accounts and interim 2023 accounts following the conclusion of a refinancing.
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