SWALA, ORCA ACQUISITION AWAITS SHAREHOLDERS MEETING

Swala Oil and Gas wants to intensify its presence in the country by buying 20 per cent stake in Orca’s Exploration Group’s PAE PanAfrican Energy Corp. The firm, bids to acquire the stake at 130million US dollars, however, is waiting a shareholding meeting.

According to Swala, the deal is expected to provide Swala part ownership of PAE’s Tanzanian subsidiary, which holds exploration and production rights for natural gas in the Songo Songo block, in partnership with the Tanzania Petroleum Development Corp.

Speaking about the agreement, Dr David Mestres Ridge, CEO of Swala, said, “This arrangement ultimately results in the benefits of more than 20 per cent of Orca’s Tanzania business being indirectly owned by Tanzanian shareholders and bondholders, providing an alternative mechanism for local participation alongside traditional listings on the Dar es Salaam Stock Exchange, and the recirculation of funds into the Tanzanian economy.”

The acquisition financing has been arranged by Exotix Capital, a London-based specialist frontier markets investment bank. Tanzanian, East African and international investors will be accessed in this month for a second tranche fundraising via a new Tanzanian bond and additional tapping of the 144A US$ bond.

In August last year, Swala Oil and Gas, said that it is looking to invest up to 130 million US dollars in the Mauritius-registered PanAfrican Energy (PAEM) for a minority stake. Orca stated that it cannot guarantee that the ongoing discussions will result in a definitive agreement.

If any such agreement is reached, then it will be based on Swala getting necessary financing along with meeting of various other conditions. Orca chairman and CEO W. David Lyons said: “We would welcome Swala’s minority participation in the Orca Group.

Orca has for some time sought the right partner for a minority stake in the Orca Group and we welcome Swala’s ability to attract and engage Tanzanian investors. “Such an investment is strategic to Orca in underpinning the intrinsic value of our business and providing a platform from which to grow and diversify our company.”

According to Orca, any possible investment from Swala is not likely to impact the management or operation of PanAfrican Energy Tanzania, its operating subsidiary and a wholly-owned subsidiary of PAEM.

Daily News