From Australia (RW): Nexus Energy has signed a merger agreement with media group Seven Group Holdings to transfer all outstanding equity in Nexus to Seven.
The offer is for A$0.02/share in cash, with a close of the deal expected in June 2014, subject to shareholder and court approval.
The deal means that Seven will effectively replace Nexus’ senior lender and a majority of unsecured debt funding financiers through the merger. It will also provide working capital, including an immediate bridge-loan facility of up to A$40mn.
Seven estimates the capital outlay over the medium-term to be about A$400mn. It will provide funds of A$235mn for capex, $50mn to fulfil senior debts, $100mn to note holders, $5mn to capitalized interest and $33mn to fund a litigation settlement with Sedco over a rig dispute for Nexus’ Crux field off Western Australia.
Seven says the investment in Nexus will bring an opportunity to become involved in a business with quality assets - notably the Crux (SEN, 29/23) gas and liquids field and the Longtom (30/10) gas field in Bass Strait - with strong growth prospects to provide longterm value.
The media company says it has always liked the energy sector and this move fulfils a desire to build a new arm of the group.
Interestingly former Woodside MD Don Voelte is CEO of Seven. Up until February he was also chairman of Nexus when he made a surprise exit, no longer able to tiptoe around the minefield of conflicts.
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