Stanbic IBTC Extends Fresh Facility to Eland Oil & Gas
Stanbic IBTC, working with its mother brand Standard Bank Group of South Africa, has partnered Eland Oil & Gas, an oil and gas production and development company operating in West Africa with an initial focus on Nigeria, to announce a new accordion facility and increased borrowing base of $50 million (about N18 billion).
The facility is being underwritten by Stanbic IBTC Bank and Standard Bank while Stanbic IBTC Capital Limited will act as a joint Bookrunner. An accordion facility is essentially an incremental facility, which allows a borrower to take an additional facility over and above what was originally agreed with the financier on the same terms as the original facility for expansion purposes.
In November 2018, Eland Oil & Gas successfully refinanced its existing reserve-based lending facility (RBL Facility) with a new 5-year syndicated RBL facility in an amount of $75 million, with the option to increase it to up to $200 million via an accordion, subject to incremental production and reserves.
Speaking during the announcement, Stanbic IBTC said the deal was an opportunity to support Eland Oil & Gas’ business expansion drive in the oil and gas industry. According to the financial institution, it will continue to leverage its excellent investment banking pedigree as well as the strength of its franchise in the Standard Bank Group, the largest financial institution in Africa, to consummate such big ticket deals that will not only help businesses grow but also help deepen key industries.
According to Eland Oil & Gas following a redetermination, the borrowing base amount increased from $103 million to $134 million and an initial accordion increase of $50 million is being underwritten by Standard Bank of South Africa and Stanbic IBTC Bank Plc, resulting in the commitments under the facility increasing from $75 million to $125 million. Of the commitments, $50 million is currently drawn.
Chief Financial Officer, Eland Oil & Gas, Ron Bain, said: “I am pleased to announce the large increase in borrowing base on our RBL facility, which demonstrates the hugely accretive quality of the new wells drilled on the OML 40 asset and the growth in value they bring to our shareholders.