Seplat has published the prospectus for its reverse takeover of MPNU with the deal expected to close on Thursday, 12th December. This has been a long time coming and is transformational for the company, more than doubling production to 120kboed and nearly doubling 2P reserves to 0.9bnboe. The final payment on completion is US$672m for a total payment of US$800m including the deposit already paid. Funding is from Seplat's existing cash and revolving credit facility, together with a new US$300m three-year Advanced Payment Facility provided by the vendor, ExxonMobil. From a financial perspective, the deal trebles adjusted EBITDA although the impact on cash flow is more muted, reflecting the high cash tax rate paid by MPNU as a result of limited investment over the last years. That represents part of the opportunity Seplat now has to unlock value from this deal.
