Ecobank Capital, the investment banking arm of Ecobank Group, leading pan-African bank, says it has successfully raised, on behalf of Orion Oil Limited, the sum of $500m to be utilised for the prepayment of crude oil cargos to be supplied by Société Nationale des Pétroles du Congo (The National Oil Company of the Republic of Congo).
According to a statement by the bank, the facility comprises a United States dollar-denominated $342m tranche and a XAF-denominated $158m tranche.
Ecobank Capital acted as the Mandated Lead Arranger, working with United Bank for Africa Plc as the co-arranging bank.
Participating lenders were Afreximbank, BGFIBank Group, UBA Group, Banque Atlantique Group and the Ecobank Group.
Orion is a privately held company whose principal activities include the physical trading of crude oil and refined products, according to the statement.
The company focuses on the value chain of the oil & gas industry, supplying approximately 100,000 metric tons of refined products each month along the West African coast and holding interests in oil & gas fields in Congo.
Orion entered into a 24-month crude oil allocation programme with SNPC, the largest oil & gas company in Central Africa.
The proceeds of the debt facility will be used to fund the prepayment of the aforementioned crude oil cargos (amounting to circa $100m per cargo) on a Free on Board basis.
This transaction is the largest loan syndication completed to date in Central Africa solely funded by regional African banks and for an indigenous company.
It clearly showcases the increasing interest of regional banks in financing capital intensive oil & gas deals in Sub-Sahara Africa, channelled through the diligent syndication expertise of Ecobank Capital.
The statement quoted the Acting Managing Director of Ecobank Capital, Mr. Ikenna Onyejiaka, as saying, “This landmark transaction underscores Ecobank Capital’s capabilities as a Lead Arranger of syndicated loans, working with Africa’s key financial institutions to provide vital support to Congo’s economic growth, especially at a time when the Eurozone crisis is threatening African businesses’ access to international markets.”
An Executive Director of Ecobank Nigeria, Ms. Foluke Aboderin, added, “Ecobank is proud to be associated with Orion Oil Limited, truly international oil company with a reputable track record. We are indeed excited to have participated in the $500m pre-export financing with SNPC, Congo.
“For us at Ecobank, this transaction is undeniably strategic and represents what we are about – leveraging on our large footprint across middle Africa to support viable businesses for the development of our continent.
“Our expectations are that we would continue this strategic alliance/partnership with Orion in a manner that is mutually beneficial to both institutions.”
The Managing Director of UBA Cameroun, Mr. Georges Wega, said, “UBA Group’s strong participation in this landmark deal underscores our passion to support African businesses and develop the economies of the continent. We look forward to doing more with more African businesses.”
According to the statement, the President of Afreximbank, Mr. Jean-Louis Ekra, observed, “Afreximbank is delighted to be part of this transaction, which not only supports Orion Oil Ltd in consolidating its position as a leading indigenous player in the oil sector, but significantly boosts the capacity of the Republic of Congo to meet the development needs of its citizens. The transaction is a reflection of Afreximbank’s commitment to promoting trade and supporting local entrepreneurs.”
It quoted the Managing Director of BGFIBank Gabon, Mrs. Patricia Manon, as saying, “Through a notable participation of $120m in funding the Orion transaction, BGFIBank Group, the pre-eminent banking group in Central Africa, reaffirms its willingness to support the development of companies operating in strategic sectors bringing additional growth to African economies.”
Source: Punch
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