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SacOil plans R800m recapitalisation

Johannesburg - SacOil Holdings [JSE:SCL], the independent African oil and gas company, has announced a proposed plan for the recapitalisation of the company up to an amount in excess of R800m, the company said in a statement issued on Friday.

The recapitalisation will retire in full the R238m debt that is currently on SacOil’s balance sheet and place SacOil in cash of up to R570m.

The recapitalisation will be structured in the first instance in the form of a conversion into SacOil equity of the R238m debt owing by SacOil to Gairloch.

The equity settlement of the Gairloch loans will leave the company debt free, which should significantly reduce financing expense.

Furthermore the recapitalisation will entail a rights issue to raise cash of up to R570m from current shareholders.

To date, the company has received an irrevocable commitment to the amount of R329m towards the proposed rights issue, according to the statement.

Provided that the rights issue is fully subscribed for, the management team expects that the cash proceeds therefrom will be sufficient to fund SacOil’s financial obligations over the ensuing 24 months on the various work programs of its underlying oil and gas concessions.

The ability to fund the financial requirements on the concessions should enable increased progress of bringing the assets to account.

Newly appointed chairperson Tito Mboweni said a recapitalised SacOil, with a strong balance sheet and strong corporate governance framework will be well positioned to develop the potential of its underlying asset value.

In addition to Mboweni, SacOil earlier announced the appointment onto the board of directors of the following independent non-executive directors: Mzuvukile Maqetuka, Ignatius Sehoole, Vusi Pikoli and Stephanus Muller.

- Fin24

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