Sound Energy makes progress on Tendrara financing

15th Mar 2023 14:34

(Sharecast News) - Sound Energy updated the market on project financing for its Tendrara Production Concession in Morocco on Wednesday.

The AIM-traded company said it had entered into an arrangement and mandate letter with Attijariwafa Bank, one of the country's leading banks, to arrange project debt financing for the second phase of development at Tendrara.

Under the agreement, the bank had been mandated to arrange a long-term project senior debt facility of up to MAD 2.25bn (£178.4m) for the partial financing of the currently-estimated $330m total development cost for the phase.

In December, the parties agreed to seek to negotiate binding terms for the financing by 15 March.

The agreement also included an extended period of exclusivity provided to the bank under the mandate until 1 June, in order to arrange the financing.

Sound Energy said "significant" progress had been made with the bank, which recently completed legal and technical due diligence for the proposed financing.

While additional pre-financing aspects, such as phase two engineering contracts, remained subject to award, finalisation, and review, the parties had now moved to more detailed financial structuring of the proposed financing, particularly with regard to taxation.

As a result, Sound Energy said the the parties had entered into a further amendment to the mandate to extend the date by which they would seek to negotiate binding terms for the proposed financing, to 28 April.

"The phase two senior debt process is continuing to move forward favourably," said executive chairman Graham Lyon.

"It is a significant and complex undertaking for all parties involved, and I am pleased that the level of engagement that we have with Attijariwafa bank and our respective legal, tax and technical advisors is very collaborative and positive.

"I am sure all stakeholders support the construction of a robust, well structured financing arrangement; we look forward to providing further updates as the process moves forward."

At 1235 GMT, shares in Sound Energy were down 0.17% at 1.72p.

Reporting by Josh White for Sharecast.com.