Sterling has completed the sale of its USA business to the Atinum Group from Korea. The Company's outstanding bank debt has been repaid in full. The sale process was handled by BMO Capital Markets.
Terms of Sale
The initial sale consideration was $90 million with an effective date of April 1, 2009 and on completion was adjusted for intra-Group cash movements since April 1, 2009 and other costs.
In addition to the initial consideration, there is a three year 'upside sharing agreement', under which Sterling is entitled to a 40% share of the annual excess net production proceeds (arising from the disposed USA business) if the average realized oil price exceeds $90 per barrel and/or the realized gas price exceeds $9 per thousand cubic feet in any of the years 2010-2012.
Use of Sale Proceeds
After adjusting for cash received from the USA business since April 1, 2009 and the various bank and other expenses associated with the sale, Sterling's net consideration is $78.9 million on completion, of which $8.3 million is held in escrow pending USA tax clearances; Sterling expects these clearances will be obtained within the next 180 days and will result in the receipt of the full escrow amount.
All of Sterling's outstanding bank debt of US $71.6 million has been repaid; the Company is now debt free. Sterling's cash balance is currently $73.4 million, including the US $8.3 million held in escrow.
Alastair Beardsall, Sterling's Chairman said, "This step completes Sterling's exit from the USA. The Company will continue to re-focusing both technical and financial resources on higher impact exploration and production opportunities."
Most Popular Articles
From the Career Center
Jobs that may interest you