Seplat seeks new capital to settle old debts

By Taofik Salako, Deputy Group Business Editor

Seplat Petroleum Development Company Plc has launched a process to raise new debt capital from the international capital market to enable it debts and finance corporate growth plan.

In a regulatory filing, Seplat, which is quoted on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE), stated that it had mandated major global investment bankers and financial institutions to launch the process.

According to the indigenous oil and gas company, Citi, J.P. Morgan, Standard Bank and Standard Chartered Bank were mandated as global coordinators while Natixis, Rand Merchant Bank and Société Générale were as mandated as bookrunning managers.

The professional parties were expected to organise a global investor call and one-on-one meeting with fixed-income investors, after which Seplat will issue new debts.

Seplat plans to issue dollar-denominated, senior unsecured guaranteed notes, subject to market conditions. The company is rated B2 by Moody’s, B by S & P and B- by Fitch.

The net proceeds of the new capital raising, according to the company, will be used “to redeem the existing Seplat 2023 notes, repay drawings under the revolving credit facility, for general corporate purposes, and to pay transaction fees and expenses”.

The Board of Seplat had earlier this month recommended payment of $58 million to shareholders as cash dividends for the 2020 business year, despite running into a major loss during the period.

Shareholders will receive a final dividend of $0.05 per share, in addition to interim dividend of $0.05, bringing to dividend for the year to $0.10 per share.

The audited report and accounts for the year ended December 31, 2020 showed Earnings before interest, taxes, depreciation, and amortization (EBITDA) at $265.8 million while operating profit stood at $121 million, before non-cash impairments and unrealised fair value losses.

The report also showed cash position of $259 million after $100 million RCF repayment, $58 million dividends paid in the year, and $150 million capital expenditure. Net debt stood at $440 million with most maturities after 2021.FSDH Group, an investment banking group, described Seplat’s performance as “weak” in 2020 with revenues declining 10.8 per cent and a loss of N30.7 billion in 2020 compared with a profit of N85 billion in 2019.According to the report, total revenue in 2020 was N190.9 billion as against N214.2 billion in 2019. The crude oil revenue declined 1.0 per cent to N150.4 billion while gas revenue slipped 34.9 per cent to N40.5 billion in […]

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