Norwegian oil firm, Aker Energy, has entered into an agreement with Africa Finance Corporation (AFC) to issue US$100 million of convertible subordinated bonds.
The bonds have a maturity of five years, with an option to extend with another three years.
As part of the agreement, AFC received equity warrants with the right to subscribe shares in Aker Energy in future equity offerings by the company of up to USD 50-100 million.
The bonds have a coupon of 5.5 per cent per year and will be converted to equity in the event of an Initial Public Offering (IPO) of Aker Energy, at an agreed discount to an IPO offering price of 1.85 per cent per year.
The proceeds from the bonds will be part of the financing for the development of the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
“We are very pleased to get AFC on board as investors in Aker Energy. We look forward to further strengthening our collaboration in the years to come, as we embark on development projects offshore Ghana,” Jan Arve Haugan, CEO of Aker Energy said in a statement posted on the company’s website.
On his part, Samaila Zubairu, President and CEO of AFC , commented that: “Partnerships with financially and technically strong sponsors, is a key component of our Natural Resources strategic focus. We are therefore delighted to be announcing this transaction with Aker Energy, which, through the Aker group, has an outstanding track record of executing complex offshore projects like the DWT/CTP block in Ghana.”
AFC is a multilateral finance development institution investing primarily in companies and infrastructure projects operating in Africa, with an equity capital base of USD 1 billion. The institution was formed in 2007 and has more than 20 African member countries, including Ghana