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FAR Announces Equity Raising to Fund Sangomar Oil Field Development

Source: 12/12/2019, Location: Africa

FAR Limited announces a conditional placement to raise A$146 million at A$0.0425 per share (Placement). In addition, FAR will conduct a share purchase plan to existing eligible shareholders to raise up to a further A$30 million at the same price as the Placement (SPP), together, the Equity Raising.

The proceeds from the Placement form part of the planned financing package to fund FARís capex to first oil for the Sangomar Oil Field development, offshore Senegal, working capital and transaction costs.

The Placement price of A$0.0425 per share represents a 21.3% discount to FARís last closing price on Monday, 9 December 2019 of A$0.054 per share and a 12.0% discount to the 5-day VWAP.

The shares issued under the Placement are conditional upon gaining shareholder approval at a General Meeting to be held on or around 16 January 2020 and on the receipt of a credit approved Term Sheet for an underwritten US$350 million senior debt facility by 31 December 2019.

New shares issued under the Placement will represent approximately 35.4% of the enlarged share capital of FAR, which will have 9,715,681,158 ordinary shares on issue. New shares issued via the Placement and SPP will rank equally in all respects with existing ordinary shares.

Use of funds
FAR intends to use proceeds from the Placement and SPP for the following purposes:
- To fund development capex to first oil Ė along with FARís existing cash reserves, a US$350 million senior debt facility (refer ASX announcement 14 November 2019), and a junior debt facility of up to US$150 million, proceeds from the Placement will be used to fund FARís share of capex to first oil of US$492 million (which includes a 10% contingency);
- To fund the transaction costs associated with the Placement; and
- To strengthen the balance sheet and support associated working capital, including capex post first oil.

Bell Potter Securities Limited is acting as the Sole Lead Manager and bookrunner to the Placement.

Update on Overall Funding Strategy
As reported to the ASX on the 14th of November 2019, FAR is pleased with the level of interest from both Australian and International Banks to participate in the syndicate for senior debt.

In addition, FAR is also pleased to have received interest in providing junior debt (mezzanine finance) to further augment FARís funding options.

FAR is targeting binding and committed terms for the senior debt upon completion of each banks credit approval process on or before the end of 2019.

For more information about related Opportunities and Key Players visit West Africa Projects

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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