Seven Energy International Limited has announced an agreement on the terms of a comprehensive capital restructuring of the Group (the “Agreed Transaction”) between: (1) Seven Energy; (2) the Company; (3) certain other members of the Group; (4) Savannah Petroleum PLC (“Savannah”); (5) lenders under the US$24.1 million term loan facility (the “Term Loan 1 Facility”) provided to, among others, the Company (the “Term Loan 1 Lenders”); (6) lenders under the US$25 million term loan facility (the “Term Loan 2 Facility”) provided to, among others, the Company (the “Term Loan 2 Lenders”); (7) the holder (the “10.50% Noteholder”) of the 10.50% Senior Secured Notes (ISIN: USG80688AC17) issued by the Company (the “10.50% Notes”); and (8) an ad hoc group of holders (the “AHG”) of the 10.25% Senior Secured Notes (REG. S ISIN: XS1093755194; 144A ISIN: XS1093754387) issued by the Company (the “SSNs”) who hold in aggregate approximately 40% of the total principal amount of the SSNs (such agreement in respect of approximately 90% of the aggregate principal amount of SSNs held by the AHG).
This transaction has been the outcome of several months of extensive and complex negotiations, whereby the AHG has been restricted from trading for over 6 months and trading in Savannah shares has been halted since early June 2017.
The Agreed Transaction
The key terms of the Agreed Transaction are set out in the term sheets (the “Term Sheets”) and the high-level steps plan (the “Steps Plan”), which are scheduled to the Lock-up Agreement (as defined below). The Lock-up Agreement (as defined below) is available for download by holders of the SSNs (the “SSN Noteholders”) only at https://sites.dfkingltd.com/seven. As part of the Agreed Transaction, it is intended that (among other things):
Savannah will acquire substantially all of the valuable assets of the Group, including, at its option, the Strategic Alliance Agreement (see below), which are to be transferred to Savannah, its subsidiaries, or an entity to be nominated by Savannah, subject to completion of a financial restructuring of the Group in accordance with the Term Sheets as summarised in paragraphs (iii)-(vii) below;new capital will be provided by Savannah with funding available for, amongst other things:operational working capital and the liquidity needs of the target Group;cash consideration to be paid to selected creditors, including the SSN Noteholders (see below for further detail); andcosts associated with the Agreed Transaction.the SSN Noteholders will receive their pro rata share of (i) US$52.5 million in newly-issued equity in Savannah and (ii) an US$87.5 million cash payment, in consideration for the discharge of all US$318.2 million SSNs and release of claims against the entities being acquired by Savannah (together the “SSN Consideration”) (with further principles set out in the relevant Term Sheet);in addition to the SSN Consideration, the SSN Noteholders shall also be offered the right to subscribe, on a pro rata basis to their holdings of SSNs, for US$25 million worth of newly-issued equity in Savannah for a total cash consideration of US$20 million (the“Equity Issuance”). The Equity Issuance shall be fully underwritten by VR Capital and each SSN Noteholder may specify an amount of shares up to its pro rata share it is willing to subscribe for as part of the Equity Issuance. SSN Noteholders who participate in the Equity Issuance shall also be entitled to a share, on a pro rata basis to their participation in the Equity Issuance, in a US$20 million New Accugas Holdco Facility (as defined in the relevant Term Sheet), for which (other than in certain circumstances) no cash consideration shall be payable by the SSN Noteholders (as described more particularly in the relevant Term Sheet and the Steps Plan)
November 22, 2024
