San Leon Provides Update in Relation to Loan from the Company's Largest Shareholder

Source: www.gulfoilandgas.com 9/8/2023, Location: Africa

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, provides the following update in relation to the Company's US$5.0 million loan (the "Loan") from funds managed by Toscafund Asset Management LLP ("Toscafund"). The proceeds of the Loan were invested in Energy Link Infrastructure (Malta) Limited ("ELI").

On 8 August 2023, the Company announced, amongst other matters, that it had entered into the Loan which is repayable by no later than 7 September 2023 and carries a coupon of 10 per cent. per annum. As part of the Loan, San Leon entered into security arrangements with funds managed by Toscafund that comprise both a debenture issued by the Company as well as assignments and pledges over all of its group companies' loan and equity interests in ELI (the "Security Arrangements"). The Security Arrangements will be released on full repayment of the Loan.

San Leon continues discussions with a third party in relation to securing an alternative loan facility of US$50.0 million, which once concluded is anticipated to be used towards, amongst other purposes: the repayment of the Loan; the making of the further investments in ELI; and the satisfaction of the Company's outstanding obligations to its creditors. Noting that the alternative loan facility is yet to be entered into by the Company and that the repayment of the Loan by the Company remains outstanding, Toscafund and San Leon have agreed to an extension of the Loan repayment date to 30 September 2023. All other terms of the Loan remain unchanged. The board of San Leon (the "Board") continues to remain optimistic that a conclusion on the alternative loan facility will be reached and will provide an update to shareholders and creditors at that time.

In consideration of funds managed by Toscafund agreeing to the extension of the Loan repayment date, San Leon has agreed to extend the exercise date relating to the warrants held by funds managed by Toscafund to subscribe for an aggregate of 8,731,809 new ordinary shares in the Company to 20 September 2025 (the "Warrant Exercise Date Extension"). The warrants are exercisable at 19 pence per new ordinary share. All other terms of the warrants concerned remain unchanged, further details of which can be found in the Company's admission document published on 8 July 2022.

Related party transaction
The extension of the repayment date of the Loan issued by funds managed by Toscafund (which owns over 75 per cent. of San Leon's issued shares) and the Warrant Exercise Date Extension are both classed as transactions with a related party under the AIM Rules for Companies. The Board (with the exception of Kolapo Ademola and Joel Price who are also both directors of ELI, the ultimate beneficiary of the Loan), having consulted with the Company's nominated adviser, Allenby Capital Limited, considers that the terms of the transactions are fair and reasonable insofar as the Company's shareholders are concerned.


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