Sino G&E Secures $50M Debt Facility for its Ordos Basin Gas Projects

Sino Gas & Energy Holdings Limited (Sino Gas or the Company) announced Monday that it has executed facility documentation with Macquarie Bank Limited (Macquarie) for a structured term debt facility of up to $50 million (the Facility).

Proceeds will be used towards the funding of Sino Gas' share of costs associated with the company's stake in the Linxing Production Sharing Contract (PSC) and the Sanjiaobei PSC (held under the Sino Gas and Energy Limited Joint Venture), located in the Ordos Basin, Shanxi Province, People’s Republic of China.

Commenting on the completed facility agreement Gavin Harper, Chairman of Sino Gas, said:

“With $57 million in cash as at the end of the June quarter and the Facility of up to $50 million, Sino Gas is well positioned to fund its development share of the PSCs towards early production and Overall Development Plan submissions and start the transition to becoming a significant gas producer”.

The final key terms of the facility are:

  • Tranche A: $10 million available to be drawn immediately
  • Tranche B: $40 million available on satisfaction of conditions precedent including Macquarie obtaining internal credit approvals
  • Amortizing term loan with final maturity of Dec. 31, 2016
  • Libor + 9.75 percent interest rate and no commitment fees
  • The Facility is to be secured against the Company’s assets including its shares in SGE
  • Sino Gas options:
    • 30 million four year options to be issued with an exercise price of $0.25 per share, of which 15 million options are issued under no conditions and 15 million options vesting is prorated on drawdown of the first $10 million of Tranche B funds
    • 20 million options to be issued at the volume weighted average price per shares over the 30 days prior to initial drawn down of Tranche B (subject to cap of $0.466 or AUD 0.50 and floor of $0.18 or AUD 0.20) prorated on the drawdown of Tranche B funds greater than $10 million

Argonaut Limited (Argonaut) acted as financial and corporate adviser to Sino Gas. Allen & Overy acted as legal advisor to the Company.


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