Zenith to provide secured loan facility to Anglo African Oil & Gas, Congo
07-01-2020 12:22:00 | by: Pie Kamau | hits: 2005 | Tags:

Zenith Energy ("Zenith"), an international oil & gas production company, announces that it has reached an agreement to provide a secured loan facility (the "Facility") to Anglo African Oil & Gas plc ("AAOG") for a total amount of £250,000.

The purpose of the Facility is to assist AAOG in addressing its immediate working capital requirements following the signing of a conditional share purchase agreement for Zenith's acquisition of an 80 percent interest in AAOG's fully owned subsidiary in the Republic of the Congo, Anglo African Oil & Gas Congo S.A.U ("AAOG Congo") ("Acquisition").

The Facility will be available, inter alia, subject to AAOG shareholder approval of the conditional SPA announced on December 27, 2019, on 25 January 2020 regardless of whether all the conditions for completion of the Acquisition have taken place.

The Facility will also be for an initial period of 6 months from January 25, 2020 and may be extended by a further 3 months if completion of the Acquisition (which following the approval the General Meeting would be conditional, inter alia, upon Ministerial consent in the Republic of Congo) has not occurred.

It will be repayable at any time by AAOG with no early repayment penalties and will have an interest rate of 5 percent per annum which will be payable on final repayment.

Zenith shall set off sums payable by it to AAOG pursuant to the SPA against the Facility, which means the Facility is essentially an advance on sums payable by Zenith to AAOG pursuant to the SPA. The Facility will be secured on the shares in AAOG Congo.

Andrea Cattaneo, Chief Executive Officer, commented:

"We have a bona fide intention to assist AAOG and its shareholders. As announced on December 27, 2019, we believe the Tilapia asset has potentially transformational productivity and we look forward to completing the deal in order to begin preparations for drilling activities in TLP-103C as soon as we assume operational control of the asset. Indeed, I am pleased to state that we have received initial indications, which shall require further confirmation in due course, that a suitable drilling rig may shortly become available in a neighbouring country."