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Thursday, June 23, 2022
Sound Energy announced that it has entered into an Arrangement and Mandate letter with Attijariwafa bank of Morocco (the Arranger) under which the Company has mandated the Arranger in relation to the arrangement of debt financing in relation to the development of Sound Energy’s Tendrara Production Concession (the Agreement).
Pursuant to the Agreement, the Arranger has been mandated, and provided with exclusivity by the Company for a period of eight months, to arrange a long-term senior debt facility with a term of no more than 12 years of up to 2.250 billion Moroccan dirhams (approximately US$250 million) for the partial financing of the currently estimated 3.000 billion Moroccan dirhams (approximately US$330 million) phase 2 development cost of the Tendrara Production Concession (the Financing).
During the term of exclusivity, the parties will seek to negotiate binding terms for the Financing within 120 days of entry of the Agreement. The Agreement envisages that any Financing arranged pursuant to the Agreement may be provided directly and/or partially underwritten directly by Graham Lyon the Arranger or by third parties.
Graham Lyon, Sound Energy’s Executive Chairman, commented on the which he says “confirms the support Sound Energy has with local financiers to undertake the Tendrara pipeline project development. Attijariwafa bank is a leading bank in Morocco and has provided Sound Energy with a compelling case to seek to provide the majority of Project Finance for the development. The Company is also progressing potential vendor financing, secondary subordinated debt and partial asset disposal options to fulfil the remaining element of Project financing required to achieve year end FID. This mandate is a significant step towards reaching Final Investment Decision unlocking further the value of Tendrara Concession to Sound Energy shareholders, that can aid the provision of economical and secure gas supply for the local Moroccan power production and domestic markets. Domestic gas supply remains a highly credible energy source for Morocco amongst the difficult geopolitical situation of international energy supply.”
The Company cautions that notwithstanding the entry of the Agreement and the award of exclusivity to the Arranger, there can at no certainty that Financing will be secured pursuant to the Agreement or as to the terms on which such financing is available
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