The Singapore-based oil and gas company Rex International Holding (REX) with its subsidiaries, the “Group” announce that the issuance of Lime Petroleum AS’s 2.5-year senior secured bond of NOK 500 million has been completed with the settlement date being 9 July 2021
According to this press release: the use of proceeds of the Bonds is to partly finance Lime Petroleum’s acquisition of the Wintershall DEA Norge AS-operated Brage field from Repsol Norge AS, refinance an existing exploration financing facility, and for general corporate purposes.
Mr. Per Lind, Chief Financial Officer of Rex, said, ‘The Bonds attracted a lot of interest in the market and were oversubscribed by more than 100 percent. We had to close the books within three days after promotion to prospective investors was kicked off by financial adviser ABG Sundal Collier ASA. I would like to congratulate our colleagues in Lime Petroleum on taking another step closer to transforming the company from pure oil exploration to full-fledged oil exploration and production.’
The issuance of the Bonds is a condition precedent for Lime Petroleum’s acquisition of the Brage Field in Norway. Placement of the bond was possible due to the Brage Field’s production profile, cash flow generation, and quality in the security package of the bond provided.
The bond is secured with, inter alia, a pledge over Rex International Investments Pte. Ltd.’s shareholding interests in Lime Petroleum, security with first priority over interests in future hydrocarbon assets which Lime Petroleum and/or its subsidiaries may acquire in future, tax balances held by Lime Petroleum today and deferred tax assets related to the Brage Field upon completion of the Acquisition. Lime Petroleum’s deferred tax assets and tax refund receivables will total NOK 644 million (approximately US$77 million) as of 1 January 2021 (‘Tax Assets’), upon completion of the Acquisition. In the event of a default on the bond, any remaining Tax Assets are backed by the Norwegian Government and can be used by bondholders to partially recoup any shortfall in the bond issue.
The maturity date of the Bonds is 9 January 2024. The coupon rate will be 3 months NIBOR* plus 8.25 percent. The Bonds are targeted to be listed on the Oslo Børs within 6 months.
It is to be noted that there will be a deduction of 22 percent in corporate tax deduction allowance in the effective interest rate for the Bond. There will also be further deduction allowance under the special petroleum tax based on a certain formula to be reviewed at the year-end.
Lime Petroleum had on 15 June 2021, entered into a conditional sale and purchase agreement to acquire 33.8434 percent interests in the oil, gas, and natural gas liquids (NGL) producing Brage Field, and the five licenses on the Norwegian Continental Shelf over which the Brage field straddles, for a post-tax consideration of US$42.6 million. The transaction is pending approval from the Norwegian authorities and is expected to be completed in the fourth quarter of 2021.
For further details of the transaction, please refer to Rex’s announcement and press releases dated 16 June 2021, 21 June 2021, and 24 June 2021.