Gasol Plc. (GAS.L), the West African energy development company, announced that it has entered into an option agreement to purchase the entire issued share capital of African Power Generation Limited or 'AfGen' from African Gas Development Corporation Limited or 'Afgas'.
Prior to commercialisation of its own gas resources, Gasol aims to develop gas markets in West Africa through liquefied natural gas or 'LNG' import projects.
AfGen has had extensive negotiations on potential projects in West Africa and elsewhere, and is in advanced discussions on three LNG import projects in the region. The agreement signed today gives Gasol the option to access an existing project pipeline as opposed to developing its own projects from scratch.
Gasol said it has entered into the Option Agreement with AfGen and Afgas, a substantial shareholder of the Company, to purchase the entire issued share capital of AfGen. The Option expires 12 months after the signature of the Option Agreement. Entry into the Option Agreement is at no cost to Gasol. The cost of exercising the Option will be 75% of fair value, as determined by third party experts at the time of exercise, and will be settled through the issuance of Gasol shares.
As part of the Option Agreement, Gasol has agreed to fund AfGen's working capital budget; provided that unless agreed by Gasol, Gasol shall not be required to lend in excess of (i) US$500,000 in any calendar month or (ii) US$5 million in aggregate. The loan shall carry interest at the rate of 10% per annum calculated from the date of disbursement to the date of repayment.
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