SDX Energy PLC has signed non-binding terms with an undisclosed company to divest all of its Egyptian assets.
SDX expects the transaction to close by the end of the fourth quarter, the company said in a press release, adding that the buyer is a “large multinational operator” with existing Egyptian interests. The expected transaction price was not disclosed.
Completion of the transaction will be subject, among other conditions, to the negotiation of the final transaction documentation, as well as the approvals of the Egyptian government.
If the transaction is completed, the consideration would significantly exceed the alternative investment market’s (AIM) market capitalization test threshold and would therefore also require the consent of SDX shareholders, the company said. After signing a purchase agreement, SDX plans to call a general meeting.
Under new senior management, SDX said it is looking to optimize its asset portfolio. The terms signed represent an important milestone “toward the crystallization of shareholder value” and position the company for further diversification in Morocco’s energy transition sector, SDX said. The company continues to examine value-adding opportunities in Morocco’s energy infrastructure and energy transition.
“The planned sale of SDX’s Egyptian assets will be a significant milestone in the company’s transition roadmap that we will soon present to our shareholders. SDX, revitalized with new management, will focus on monetizing exciting opportunities around its Moroccan assets and related. The energy transition sector plays to reward and deliver capital growth to our shareholders in the near term,” said Daniel Gould, CEO of SDX.
According to the company’s website, SDX has operations in Egypt’s South Disouq and West Gharib. The South Disouq and Ibn Yunus fields are operated by SDX with a 55% working interest, while IPR Energy holds the remaining 45%. In the Eastern Desert, SDX has a 50% non-operated interest in the Meseda and Rabul fields, located in Blocks G and H, respectively, within the West Gharib concession.
Earlier, SDX secured financing to expand its gas production in Morocco through a syndicated convertible loan agreement with Aleph Finance Ltd. for up to $3.25 million, according to a previous press release.
An initial amount of $2 million has been drawn and will be used immediately to reduce outstanding debt with the European Bank for Reconstruction and Development, to pay critical service providers to accelerate Morocco’s drilling campaign and for general corporates, SDX said.
The syndicated loan is unsecured, convertible at any time at the option of the individual lenders and repayable 364 days after the initial disposition of the convertible loan.
“Our vision for SDX is to become the leading energy provider in Morocco, offering combined gas and renewable energy solutions to our existing and growing customer base. SDX is uniquely positioned to leverage its long presence and infrastructure in Morocco to execute this vision. To fulfill this vision, the company will access a wider capital market for renewable projects, which can be financed independently,” said Gould.
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