LEADING PNG gas reserves holder and takeover target InterOil Corporation has entered into a new US$470 million senior secured credit facility. The new facility is aimed at refinancing and replacing an existing US$400 million secured capital expenditure facility.
InterOil said that in addition to the proposed and log delayed acquisition of the company by ExxonMobil, the company’s independent transaction committee has had numerous discussions regarding InterOil’s financial position and recognised that the availability of additional capital would be important to InterOil on a going-forward basis.
It had been agreed that in order to ensure that InterOil would have sufficient capital to meet its ongoing expenditure obligations, the committee recommended to the Board that management of InterOil continue to explore the availability of additional funding options.
The facility is secured at an annual interest rate of LIBOR plus 6.5% and terminates at the end of 2017. In addition, if InterOil receives the interim resource certification payment (as contemplated by the share purchase agreement dated March 26, 2014 between subsidiaries of InterOil and Total S.A.) prior to the closing of the proposed transaction with ExxonMobil, the amount of such payment must be used to repay amounts outstanding under the facility.
Lenders in the facility include Australia and New Zealand Banking Group Limited (ANZ), Intesa Sanpaolo SPA, Westpac PNG Limited, Bank of South Pacific Limited, Macquarie Bank Limited, Credit Suisse AG, Morgan Stanley and UBS AG. The financing was led by ANZ who acted as Structuring and Documentation Bank.