Niko Resources Ltd. has announced that it has executed a definitive sale and purchase agreement for the sale of its 25% interest in Block 5(c) in Trinidad and Tobago to a subsidiary of the BG Group, 75% interest owner and operator of the block, for gross proceeds of $62 million.
Under the terms of the agreement, a deposit for a portion of the sales price will be paid to Niko in early April. Closing of the transaction is subject to the Government of Trinidad and Tobago, other conditions customary for transactions of this nature, and closing adjustments.
Upon closing of the transaction, under the settlement agreement entered into in December 2013 with Diamond Offshore, a specified portion of the proceeds will be used to reduce the Company’s outstanding obligation to Diamond.
In addition, under the terms of the Company’s term loan facilities agreement, $20 million of the proceeds will be used by the Company to fully repay Facility E and, depending on certain circumstances, some or all of the remaining proceeds will be offered to the Lenders as a potential partial prepayment of Facility A.
“In November 2013, we announced our restructuring plans for the Company and in December, we closed on a comprehensive financing package. The sale of our interest in Block 5(c) is another important step in our plans and we look forward to further progress as we move through the year,” said Jake Brace, President.