New Age secures debt facility

05 July 2016, Week 26, Issue 646

New Age (African Global Energy) has closed a US$425 million senior secured facility, it said on June 30, drawing down US$350 million. The facility was led by EIG Global Energy Partners and the Africa Finance Corp. (AFC). The privately owned company did not reveal specific plans for the facility, saying only that it would use the cash to expand its production in its existing areas and develop more fields within its portfolio. 

 

“We are pleased to have concluded this debt facility with a group of highly respected lenders in a difficult market. Our developments work at low break-even prices, offering good returns even in the prevailing commodity environment, and have attracted commensurate financing,” said New Age’s CEO, Steve Lowden. “So far in 2016, we have managed to secure some $600million of debt and equity, giving New Age an exceptionally strong balance sheet at the bottom of the commodity cycle. Moreover, this facility ensures the company is fully funded to deliver sanctioned and planned capex projects through to free [up] cash flow.”

A statement from AFC said it was investing US$75 million in the US$425 million senior mezzanine facility for New Age. The financial group did not reveal further names of the facility’s backers but did say they included a Middle Eastern sovereign wealth fund (SWF). 

“While the recent volatility in the oil industry has been challenging, AFC believes the current market provides opportunities for long-term investors across the value chain,” said the company’s president and CEO, Andrew Alli. The AFC statement went on to say the lenders were working with New Age to enhance its “existing robust corporate governance”. It also highlighted a link between New Age’s gas production and Nigeria’s mounting power sector needs. 

New Age noted a number of recent achievements, including reaching first oil at Nigeria’s Aje field in addition to the Litchendjili and Nene Marine fields, in the Republic of Congo (Brazzaville). It also recently started up Shewashan, in Iraq’s Kurdistan area. New Age said it had been advised on the deal by Evercore. New Age was founded in 2007 and has a number of heavyweight supporters, including Och Ziff, South Africa’s Palladino Holdings, Tokyo Sexwale’s Mvelaphanda Group and Kerogen Capital.