Loyz Energy Limited (Loyz Energy or the Group), a fast-growing Singapore-based upstream energy group, announced Thursday that it has entered into an agreement to terminate their existing five-year lease with Fram Exploration ASA (Fram) (Termination).
In consideration for the early Termination, a termination fee of $13.8 million shall be payable to Fram, which is to be satisfied by a $2.5 million payment in cash and 136.5 million of new Loyz Energy shares, to be issued at $0.0832 (SGD 0.11) each. Fram has also committed to a nine-month lockup period for these new shares.
The issuance of the 136.5 million new Loyz Energy shares is conditional upon approval from shareholders of Loyz Energy, listing and quotation notice granted by the Singapore Exchange (SGX) and the issuance of new Loyz Energy shares to Jit Sun Investments Pte. Ltd. (Jit Sun) -- the company's pursuant to a conversion of its existing outstanding loan to Loyz Energy, such that Fram will not, at any single time, be the single largest shareholder of Loyz Energy. Demonstrating its on-going support to the Group, Jit Sun has agreed to buy the 2 rigs from Loyz Energy for $16 million in cash (Disposal, and together with the Termination, the Transactions). This allows the Group to reduce its borrowings and further strengthen its balance sheet.
Adrian Lee, the Group’s managing director, commented: “The back-to-back Transactions in relation to the rigs are beneficial to the Group, as it allows us to reduce our gearing and finance costs significantly, and continue to focus on our core assets. With our Thai asset delivering sterling results coupled with a stronger balance sheet after the Transactions, we are well positioned to accelerate growth plans as oil prices stabilize and rebound.”
The Transactions are to be approved by shareholders and expected to complete by June.
With the completion of the Transactions, the Group is poised to deliver an EBITDAX (earnings before interest, taxation, depreciation, amortisation and exploratory expenses) of approximately $12 million for the current financial year ending June 30. Strong EBITDAX growth is expected as the Group continues to focus and develop its core assets.
In a separate release Thursday, Loyz reported another profitable quarter for the three months ended March 31 (3QFY15). Backed by contributions from the Group’s 20 percent-owned producing Thai assets, Loyz Energy recorded net attributable profit (PATMI) of $0.1 million on the back of a revenue of $4.7 million.
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