Monday 19 August 2019

Fanning's San Leon boosted as rival withdraws petition to have it wound up

Oil and gas explorer San Leon has been pulled back from the brink after a petition to have it wound up was withdrawn from the High Court in Dublin. Stock image
Oil and gas explorer San Leon has been pulled back from the brink after a petition to have it wound up was withdrawn from the High Court in Dublin. Stock image
Gavin McLoughlin

Gavin McLoughlin

Oil and gas explorer San Leon has been pulled back from the brink after a petition to have it wound up was withdrawn from the High Court in Dublin.

The petition was lodged by Avobone, a company with which San Leon has had a long-running battle mainly relating to a loan San Leon had received from Avobone. San Leon, which had partnered up with Avobone on an asset in Poland, maintained the loan was only repayable in certain circumstances which had not been met.

Avobone disputed this and after various arbitration and court hearings San Leon agreed to pay €23.3m plus interest to Avobone.

The schedule for repayments was revised a number of times after San Leon had difficulty making payments - the company has itself been left waiting for loan note repayments due out of a project in Nigeria.

After the withdrawal of the petition, San Leon says it has to pay €3.3m on or before December 19 and €8.3m on or before January 15. A payment of €4.2m due tomorrow at the latest has been made.

"As previously announced, the company is scheduled to be repaid approximately US $19m a quarter on its loan notes from Q4 2017, with the next payment due to be received by the company on or before 1 January 2018. The company has received $5m of the sum due this quarter to date, which was allocated to Avobone."

San Leon - run by former Smart Telecom boss Oisin Fanning - told the market in the summer that a Chinese company had made an indicative takeover offer valuing the company at 67-76p a share.

A formal offer was contingent on the completion of due diligence - with the Chinese expecting to be able to make a their move within 45 days according to San Leon. That period of time elapsed and no offer was forthcoming.

San Leon then said it was still in dialogue with the company, China Great United, which had said the reason for the delay in due diligence was that it was now talking to a potential partner who could add value to the Nigerian project.

Another potential is a merger with Midwestern - a partner in the Nigerian project.

"San Leon remains in discussions with Midwestern, which are at a very early stage and broad-ranging, regarding a potential corporate transaction, which could include an offer by Midwestern for San Leon or an offer by San Leon for certain assets of Midwestern," the company said earlier this month.

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