July 15, 2015: FCMB Capital Markets Limited, the investment banking subsidiary of FCMB Group Plc, has again demonstrated its capital raising credentials by facilitating the successful financial close of a US$445 million Senior Debt Facility for Accugas Limited.
Accugas is the indirect, wholly-owned, subsidiary of Seven Energy International Limited, an independent Nigerian integrated oil and gas exploration, development, production and gas distribution company.
The deal, which involves a consortium of banks will be signed at a grand ceremony today Wednesday, 15 July 2015, in Lagos.
Accugas Limited will use the funds to refinance its existing loan facilities and to meet additional funding needs of the business. This will enable Accugas achieve its overall objective of satisfying the growing gas demand from power plants and industrial users in Nigeria.
FCMB Capital Markets was Joint Structuring Bank, Joint Mandated Lead Arranger and Technical Bank in the transaction. In its capacity as Joint Mandated Lead Arranger, it played a critical role in ensuring that the transaction achieved financial close.
Furthermore, FCMB Capital Markets in its capacity as Technical Bank, is one of very few Nigerian investment banks to continue to demonstrate the ability to allocate the technical and operational risks associated with complex projects, having performed the same role on a number of transactions like the US$225 million Accugas II transaction, which closed in 2013, for the construction of the company’s Central Processing Facility (CPF) and second gas pipeline project, from Uquo to Oron in Akwa Ibom State, to supply gas to the Niger Delta Independent Power Plant at Calabar, Cross River State.
In its capacity as the Technical Bank for the US$445 million facility, FCMB Capital Markets worked with the lenders and their technical adviser to ensure that Accugas satisfactorily addressed all technical milestones, including surface and sub-surface related issues.
Speaking about the transaction, the Executive Director, FCMB Capital Markets, Mr. Tolu Osinibi, expressed satisfaction with the successful closure of the deal. He commended Seven Energy for its ongoing and significant contributions to the development of Nigeria’s energy sector.
According to him, “aside from playing its part in ensuring the successful completion of the transaction, FCMB Capital Markets will continue to take seriously its commitments and responsibility as the Technical Bank”.
Osinibi added that “this role remains very important in ensuring that Accugas continues to realise its expansion plans, by adequately monitoring the various complex issues associated with the projects, on behalf of the syndicate of lenders”.
Analysts are of the opinion that the various projects being executed by Accugas are important developments towards monetising gas, bridging the supply deficit and stimulating further investment in Nigeria’s gas infrastructure.
With reserves estimated at 187 trillion cubic feet of proven natural gas reserves (as at December 2010), Nigeria has Africa’s largest reserves and is the 9th largest producer in the world. However, despite its abundance, its gas resources remain largely undeveloped.
FCMB Capital Markets Limited has been involved in landmark transactions in Nigeria for over the past three decades, from its beginning as City Securities Limited.
The firm provides comprehensive advisory services, combining innovative advice and proven execution skills, to domestic and multinational clients. Its services include but are not limited to financial advisory; debt and equity capital raising including initial public offerings; mergers and acquisitions, and project and structured finance. It continues to serve as an adviser and arranger of choice to Nigeria’s leading companies and public institutions.
By Emmanuel Thomas
