Savannah offers to swap Seven’s $318.23 million 10¼% notes for buyout

By Susanna Moon

Chicago, Jan. 24 – Savannah Petroleum plc is offering to exchange the $318,228,108 principal amount of 10¼% senior secured notes due 2021 issued by Seven Energy Finance Ltd.

The company is offering a combination of cash and shares of Savannah in exchange for tendered notes.

London-based Savannah is also soliciting consents to amend the notes to remove restrictive, information and various compliance covenants and related events of default, to remove change-of-control offer provisions, to specify that Savannah will not be considered an "affiliate" as defined in the notes indenture for the purposes of any future voting and to make clarifying changes to the release of security provisions.

The exchange is being held to facilitate Savannah’s proposed acquisition of some of the Nigerian oil and gas assets of Seven Energy, according to a notice by Seven Energy.

The exchange offer and consent solicitation will remain open until 11 a.m. ET on Feb. 6.

Settlement is expected to occur on Feb. 9.

Holders may not consent to the proposed amendments without exchanging or vice versa.

The exchange agent is D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230, https://sites.dfkingltd.com/savannah or savannah@dfkingltd.com).

Restructuring lock-up

As reported Dec. 22, Seven Energy Finance Ltd. and parent company Seven Energy International Ltd. announced changes to the terms of a lock-up agreement related to the Seven Energy group’s comprehensive capital restructuring.

Other parties to the agreement included Savannah Petroleum plc, lenders under the company’s $25 million term loan facility and an informal group of holders of about 40% of the total principal amount of Seven Energy’s 10¼% senior secured notes.

Under the changes, the restructuring of the senior secured notes will be implemented by way of a tender offer by Savannah or a scheme of arrangement proposed by the company, in either case expected to be launched in January.

In exchange for their holdings, the senior secured noteholders were to be offered their share of $109.5 million newly issued equity in Savannah and a $42.5 million cash payment from Savannah.

The noteholders also were to be offered the right to subscribe for $26.7 million worth of equity in Savannah for total cash amount of $20 million.

The term loan facility holder will receive $9.2 million in newly issued equity in Savannah and a $3.5 million cash payment in consideration for the discharge of the facility and release of claims against the entities acquired by Savannah.

As part of the amendment, a noteholder who is not a party to the amendment agreement may terminate the lock-up agreement only for itself if it does not support the changes by providing notice by noon ET on Jan. 5.

The Nigeria-focused energy company is based in Lagos and London.

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