AFC signs $100 million convertible bonds agreement with Aker Energy

09 Jul 2019
Financial Nigeria


Aker Energy has issued $100 million subordinated convertible bonds to the AFC per the terms of the agreement.

Samaila Zubairu, President & Chief Executive Officer, Africa Finance Corporation

Africa Finance Corporation (AFC), a multilateral finance institution, has signed a convertible subordinate bonds agreement with Aker Energy Ghana Ltd, a subsidiary of Aker Energy AS – a Norway-based oil exploration and production firm. Under the agreement, Aker Energy has issued $100 million subordinated convertible bonds to the AFC.

The bonds have a coupon of 5.5 per cent per year. In the event of Aker Energy’s initial public offering (IPO), the bonds will be converted to equity at an agreed discount to an IPO price of 1.85 per cent per year. The bonds have a maturity of five years, with an option to extend for another three years. The transaction was managed by Arctic Securities AS, a leading Norwegian investment bank.

“We are very pleased to get AFC on board as investors in Aker Energy,” Jan Arve Haugan, CEO of Aker Energy, said. “We look forward to further strengthening our collaboration in the years to come as we embark on development projects offshore Ghana.”

According to a statement released by Aker Energy on Monday, the proceeds from the bonds will be used in financing the development of the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana. Aker Energy owns 50 per cent participating interest in the DWT/CTP block, while LUKOIL owns 38 per cent, the Ghanaian National Petroleum Corporation owns 10 per cent and Fueltrade owns 2 per cent.

Earlier this year, Aker Energy reportedly discovered the biggest oil field in Ghana. An estimated 550 million barrels of oil equivalent was discovered in Aker’s Pecan field, which is about 116 kilometres southwest of Takoradi in western Ghana.

The President and CEO of AFC, Samaila Zubairu, said: “Partnerships with financially and technically strong sponsors is a key component of our natural resources strategic focus. We are, therefore, delighted to be announcing this transaction with Aker Energy, which has an outstanding track record of executing complex offshore projects like the DWT/CTP block in Ghana.”

As part of the agreement, AFC has received equity warrants with the right to subscribe shares in Aker Energy in future equity offerings by the company between $50 million and $100 million. Zubairu added that AFC intends to take part in other capital market activities initiated by Aker Energy in the future.

Established in 2007 with an equity capital base of $1 billion, AFC is a multilateral development finance institution that invests in infrastructure projects and companies operating in Africa.

Aker Energy aims to become the offshore oil and gas operator of choice in Ghana, by maturing and producing resources in a safe and reliable manner to the benefit of the company, its partners and the people of Ghana.

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