By InvestAdvocate

Lagos (INVESTADVOCATE)-First listed Nigerian oil and gas upstream firm, Seplat Petroleum Development Company Plc said on Thursday it has reached agreement to release through its wholly owned subsidiary Newton Energy Limited the sum of $408 million which was held in an escrow account.

Seplat disclosed this in an issuer’s announcement with the Nigerian Stock exchange (NSE). “Pursuant to an agreement reached by the Group, the sum of $408 million which was held in an escrow account has been released,” the company said. 

First listed Nigerian oil and gas upstream firm said the escrow account was originally set up in connection with a potential acquisition of an asset by a consortium, which Newton has an option to invest into.

It says there have been material delays with the underlying acquisition, prompting Seplat to reach agreement with the consortium for release of the Escrow amount.  The remaining $45 million of the $453 million which was allocated as a refundable deposit remains as a deposit with the potential vendors of the asset whilst negotiations between the consortium and vendors continue.

“Certain recent events have led to the restart of negotiations by the consortium to secure the asset, and Seplat continues to work with them. As this process continues, and following the release of the Escrow amount, a sum of US$29 million has been placed into a new escrow account in London, pending agreement of final terms of the acquisition transaction. The remaining balance of US$368 million has been returned to the Group,” the company disclosed.

According to Seplat in the event that terms can be agreed for the potential acquisition of the asset by the consortium and Newton agrees to proceed with the investment, the funds in escrow will be released back to Newton.  Should Newton at its discretion decide not to proceed with the potential investment, an additional payment of $20 million will be made to other consortium members with the remaining funds in escrow released to Newton.

Newton has also agreed to pay a portion of previously incurred consortium costs equating to US$11 million, payable US$3.5 million now and US$7.5 million on a deferred basis.