25/06/2014 - 14:54

Macquarie provides $50m loan to Sino Gas

25/06/2014 - 14:54

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Sino Gas & Energy Holdings has signed a term sheet with Macquarie Bank for a US$50 million loan, which will be used to support its joint venture entity’s working interests in the Linxing and Sanjiaobei production sharing contracts at the Ordos Basin in China.

Macquarie provides $50m loan to Sino Gas

Sino Gas & Energy Holdings has signed a term sheet with Macquarie Bank for a $US50 million loan, which will be used to support its joint venture entity’s working interests in the Linxing and Sanjiaobei production sharing contracts at the Ordos Basin in China.

The Perth-based gas explorer’s loan will comprise of two tranches, the first in the form of $US10 million and the second in the form of $US40 million, which is subject to satisfaction of further conditions, including Macquarie obtaining internal credit approvals.

“With $US57 million in cash as at the end of the March quarter and the facility of up to $US50 million, Sino Gas is strongly positioned to fund its development share of the production sharing contracts towards early production and overall development plan submissions and start the transition to becoming a significant gas producer,” Sino Gas chairman Gavin Harper said. 

“Sino Gas has undertaken a strongly contested and rigorous tender process for the facility and has negotiated very competitive terms with a reasonable headline interest rate and most importantly limited dilution to our shareholders with a modest number of options issued at a significant premium to our current share price.” 

As part of the loan agreement, 30 million four-year Sino Gas options will be issued with an exercise price of 25 cents per share, and a further 20 million options will be issued at the volume weighted average price per share over the 30 days prior to initial drawdown of the second tranche. 

“Macquarie has an excellent reputation as a leading international investment bank and combined with its proven depth of experience in financing oil and gas projects globally, we see their involvement as a major endorsement of Sino Gas and our projects,” Mr Harper said.

Argonaut acted as financial and corporate adviser to Sino Gas. 

Sino Gas last traded at 15.5 cents per share at 2:45pm WST.  

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