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Oando Energy Resources Inc., a company focused on oil and gas exploration and production in Nigeria, Thursday announced that it had entered into a second facility agreement with Oando Plc, the 94.6 per cent shareholder of the company (“Oando“), pursuant to which Oando Energy Resources will borrow US$200 million, at an annual interest rate of five per cent, repayable in cash by February 28, 2014.
The intended use of proceeds of the loan will be payment of the purchase price for the proposed acquisition by Oando Energy Resources of the Nigerian upstream oil and gas business of ConocoPhillips. Pursuant to the Second Facility Agreement and the facility agreement between the Company and Oando dated May 30, 2013, as amended, Oando Energy Resources owes an aggregate of US$601 million plus interest to Oando.
The Second Facility Agreement does not become effective until Oando Energy Resources confirms in writing to Oando that (i) approval from the Toronto Stock Exchange in respect of the Second Facility Agreement has been obtained and (ii) the independent directors of the company unrelated to Oando have recommended the approval of the effectiveness of the Second Facility Agreement to the board of directors of the company, who have approved the effectiveness of the Second Facility Agreement (with directors affiliated with Oando abstaining from the vote).
Although the company believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the company can give no assurance that such statements and information will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined and the future price of crude oil.
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