Saturday 21 April 2018

San Leon blames procedural reasons for delay in filing accounts

Former Smart Telecom chief executive Oisin Fanning heads up San Leon energy company
Former Smart Telecom chief executive Oisin Fanning heads up San Leon energy company
Gavin McLoughlin

Gavin McLoughlin

London-listed Irish oil and gas explorer San Leon energy is blaming "procedural reasons" for its failure to publish its accounts on time.

Shares in the company, headed by former Smart Telecom chief executive Oisin Fanning, were suspended on Monday after it had failed to publish the financial statements before the end of June.

Last year, San Leon executed what Fanning called a "transformational deal" to take an interest in an oil-producing asset in Nigeria.

It said the accounts were being delayed by the need to incorporate the consolidated financial statements of a company called Midwestern Leon Petroleum, which was used to hold its interest in the Nigerian asset.

It was also used to hold another company's interest in the asset and so San Leon is using a technique called "equity accounting", which companies use to measure the value of their investments in other companies.

"The consolidation process involves several jurisdictions and has taken longer than expected for what is the first such consolidation and equity-accounted investment in Nigeria for San Leon," a statement from San Leon said.

"When this process is completed, it will be followed by a number of normal audit confirmatory and technical review matters which, when completed, will then put the company in a position to finalise and publish its financial statements."

The company added: "Dealings in San Leon's ordinary shares will remain temporarily suspended until such time as the accounts have been duly published."

In April, San Leon said it was due around $58m (€51m) in principal and interest repayments from its Nigerian deal.

At that time, it had received $5m from its Nigerian partners.

Less than two weeks ago, the company said it had received a conditional takeover offer, valuing it at £305m-£347m (€347m-€395m).

A company called China Great United Petroleum (Holding) is behind the offer, according to San Leon. It is conditional on the Chinese company completing due diligence to its satisfaction.

The offer has not been formally tabled and there is no certainty that it will be tabled. It gives an indicative value of 67p-76p per share. San Leon's shares were suspended at 34.75p, valuing it at £158m.

The company's biggest shareholder is Toscafund, founded by London hedge fund manager Martin 'the Rottweiler' Hughes.

Sunday Indo Business

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