REG - Sound Energy PLC - Project Finance Update

Sound EnergyAnnouncement

28/06/2023 07:00

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RNS Number : 1163E  Sound Energy PLC  28 June 2023

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28 June 2023

 

Sound Energy plc

("Sound Energy" or the "Company")

 

Project Finance Update

 

Attijariwafa bank conditioned project financing offer of up to US$237 million,
the first of its size for a gas field development in Morocco

 

 

Sound Energy (AIM: SOU), the transition energy company, is pleased to provide
an update in relation to the project debt funding for the phase 2 development
of the Tendrara Production Concession and announces the receipt of a
conditioned offer made by Attijariwafa bank.

 

Project Debt Funding

 

The Company announced on 23 June 2022 that it had entered into an Arrangement
and Mandate letter (the "Mandate") with Attijariwafa bank (the "Arranger"), a
Moroccan multinational bank and one of the leading banks in Morocco, under
which the Company mandated the Arranger in relation to the arrangement of
project debt financing for the Phase 2 development of Sound Energy's Tendrara
Production Concession (the "Agreement").

 

Under the Agreement, as amended and extended, the Arranger was mandated to
 arrange a long-term project senior debt facility with a term of no more than
12 years of up to 2.250 billion Moroccan dirhams.

 

The Company is pleased to announce that the Company, on behalf of the Tendrara
Production Concession partners, have now received a conditioned offer from the
Arranger for a maximum financing of MAD 2.365 billion (c.US$237 million),
proposed to be 100% underwritten by the Arranger, subject to the conditions
precedent to the conditioned offer being satisfied prior to 30 September 2023
(the "Conditional Offer").

 

Material terms of the Conditioned Offer

 

·   Borrower: A to be newly incorporated Tendrara Production Concession
partner special purpose vehicle incorporated under Moroccan law (the
"Borrower").

 

·   Loan amount: MAD 2.365 billion (approx. US$237 million) subject to a
maximum gearing level of 65%.

 

 

·   Term: 12-year term including 2 year grace period from first drawdown.

 

·   Security: Customary security package over Borrower and Tendrara
Production Concession.

 

·   Interest rate: Optionality provided to the Borrower to select from
fixed rate, variable and fully floating alternatives with at customary margins
for hydrocarbon infrastructure development project financing facilities.

 

·   Use of loan proceeds: Design, drilling, construction and operation of
wells, a treatment facility (CPF) and a gas pipeline (from CPF to GME) to
transport and sell the natural gas produced under the Tendrara Production
Concession to the ONEE, as well as all related activities.

 

·   Conditions Precedent to the Conditional Offer:

 

o Governmental and Ministerial approvals.

o Tax authority clearance of loan structure.

o Amendment of certain Governance documents to lenders satisfaction.

o Amendment of Gas Sales Agreement to lenders satisfaction.

o Conclusion of Pipeline interconnection agreements to the lenders'
satisfaction.

o FEED update to lenders satisfaction & agreement(s) in place with
different contractors such as EPC, Rig provider, O&M etc.

o Various ancillary plans and budgets.

o Completion of further DD (including insurance, E&S, Tax, etc.) to be
satisfactory for the lenders.

o Finalisation and entry of binding Loan Financing documentation in
satisfactory form for the lenders.

o First drawdown from debt facility conditioned to simultaneous capital
contribution in ensuring maximum gearing of 65%.

 

·  Long stop date to the Conditional Offer: 30 September 2023.

 

 

Commenting, Graham Lyon (Executive Chairman) said:

 

"We are delighted to have received the conditioned offer from our debt
Arranger and lead bank Attijariwafa bank for an increased amount of MAD 2.365
billion. The majority of the conditions precedent to their offer are to be
expected and as a result the Company has been advancing a number of these for
these for some time. We look forward to working with the Arranger to conclude
on what will be the first financing of its size for a gas field development in
Morocco and further announcements will be made, as appropriate, in due
course."

 

 

For further information visit www.soundenergyplc.com follow on twitter
@soundenergyplc or
contact:
 

 Flagstaff Strategic and Investor Communications  sound@flagstaffcomms.com (mailto:sound@flagstaffcomms.com)

 Tim Thompson                                     Tel: +44 (0)20 129 1474

 Mark Edwards

 Alison Allfrey

 Sound Energy                                     chairman@soundenergyplc.com (mailto:chairman@soundenergyplc.com)

 Graham Lyon, Executive Chairman

 Cenkos Securities - Nominated Adviser            Tel: +44 (0)20 7397 8900

 Ben Jeynes

 Peter Lynch

 SP Angel Corporate Finance LLP - Broker          Tel: +44 (0)7789 865 095

 Richard Hail

 Gneiss Energy Limited - Financial Adviser        Tel: +44 (0)20 3983 9263

 Jon Fitzpatrick

 Paul Weidman

 Doug Rycroft

 

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