Swala bid for Orca shares held
Dar es Salaam. The Tanzania Petroleum Development Corporation (TPDC) has written to Swala Oil and Gas (Tanzania) PLC requiring it to put on hold its plans to purchase Orca Exploration Group’s shares.
According to the press release issued yesterday by TPDC and signed by its acting managing director, this is to enable the government to assess the all-round impact – if any – of the proposed transaction.
On January 2 this year, Swala issued a press release informing the general public that it had reached an agreement with Orca to acquire up to 40 per cent of the latter’s shares in the wholly-owned Mauritius subsidiary PanAfrican Energy Corporation.
Swala is able, willing and ready to pay $130 million (about Sh289 billion at the prevailing exchange rate) for the shares – $16.3 million (about Sh36.3 billion) of which was to be paid by issuing 16.3 million preferred shares to Orca. But this modality is subject to shareholder approval at the company’s upcoming annual general meeting (AGM).
TPDC’s decision to stay the Swala/Orca transaction is aimed enabling the government and its institutions to satisfy themselves that the deal will have no adverse effect(s) on the Production Sharing Agreement (PSA) signed between the government, TPDC and PanAfrican Energy.
The caution by the TPDC is founded upon the possibility that the transaction is likely to touch upon the interests of PanAfrican Energy, a company that is undertaking petroleum activities in Tanzania.
TPDC wishes to inform the general public that it has demanded that all the companies involved in the transfer processes put the transaction on hold. This is to enable the government and its institutions to be fully appraised of the transaction, reads the TPDC press release in part – adding that the public will be notified of the results after the government is satisfied regarding the deal.
If and when the government and TPDC are satisfied, then Swala – the first oil and gas exploration company in Tanzania to be listed on the Dar es Salaam Stock Exchange – will go ahead to acquire PanAfrican Energy through its subsidiary Swala (PAEM) Ltd (SPL).
Financing for the envisaged acquisition has been arranged by Exotix Capital, a London-based specialist frontier markets investment bank. This is according to a statement issued on January 2, 2018.
Exotix placed a gross $25 million from US institutions under an ‘early bird’ 144A US dollar bond offering. This is ‘a first’ for a Tanzanian company.
Swala conducted a roadshow in Tanzania, Kenya and Uganda in early August last year, which is believed to have fuelled significant investor interest.
