3rd Feb 2020 18:06
(Alliance News) - ADM Energy PLC on Monday said it has agreed with Trafigura Pte Ltd to develop investment opportunities in the African energy sector.
The company, which invests in oil and gas sector, said it will create a strategic alliance with Trafigura, which will provide ADM with conditional pre-financing of up to USD100 million for the acquisition or development of "approved projects".
It is also expected that Trafigura may subscribe for up to USD20 million in convertible loan notes in ADM. Trafigura will have the exclusive rights to market the crude oil produced by the approved project.
In turn, ADM said it will be responsible for originating, analysing, developing, structuring and negotiating the projects with counterparties and presenting them to Trafigura for further evaluation.
Under the deal, which has a term of 12 months unless terminated earlier by mutual agreement, ADM and Trafigura will cooperate to structure and arrange complementary debt and equity funding for approved projects.
"We have identified a number of excellent investment opportunities in Nigeria and West Africa. With our extensive network, and the potential access to capital this memorandum of understanding gives to ADM, we believe the company is well positioned to capture future opportunities," said ADM Chief Executive Osamede Okhomina.
ADM shares closed 7.4% higher in London on Monday at 4.35 pence each.
By Evelina Grecenko; [email protected]
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