irst City Monument Bank Plc and Stanbic IBTC Bank Plc have granted a loan of $230m to First Hydrocarbon Nigeria Limited for the acquisition of a 45 per cent interest in Oil Mining Lease 26 from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigeria Agip Oil Company. A statement by FHN made available to our correspondent on Thursday added that the company had completed arrangements on debt financing facilities totalling $280m. It said, "The first facility provides up to $230m of acquisition and development finance over five years with FCMB Capital Markets Limited as Global Coordinator and FCMB and Stanbic IBTC Bank Plc as mandated lead arrangers and book runners. "The second facility provides $50m of mezzanine finance over six years from the Pan-African Investment Partners II, managed by Kingdom Zephyr Africa Management." The statement noted that the completion followed the agreement signed in October 2010 and the receipt of all necessary government and customary approvals. "The Nigerian Petroleum Development Company, the oil and gas exploration and production subsidiary of Nigerian National Petroleum Corporation, the operator of OML 26, will partner with FHN in the re-development of the block. The partnership further reinforces the Memorandum of Understanding and Confidentiality Agreement signed between NPDC and FHNs Technical Service Partner, Afren Plc, in November 2009," the statement added. The Chief Executive Officer, FHN, Mr. Labi Ogunbiyi, said the transaction marked a new era of collaboration between NPDC and the private sector. According to him, together with NPDC, FHN will seek to aggressively grow reserves, increase indigenous production and support the expansion of the local services industry. Ogunbiyi added, "The support demonstrated by our Nigerian financing partners is a clear endorsement of the growing indigenous E&P industry in Nigeria. We are immensely proud that, working with FCMB and Stanbic IBTC, we have been able to secure the full amount of commitment on our syndicated debt from Nigerian institutions. "At the same time, we have secured $50m of mezzanine debt finance from the Pan-African Investment Partners II Fund, managed by Kingdom Zephyr." "This is a strong local and international validation of our business model, the quality of our assets and the future of the indigenous sector as a whole. Not only do we have financing in place for the fast- track re-development of OML 26, but also for further acquisitions," Ogunbiyi added.Meanwhile, analysts have said that this is an indication that big lending by deposit money banks has resumed after the global credit squeeze that hit Nigeria. Banks, since the beginning of the global credit crunch in 2009, have reduced their risk exposure to the oil and real sectors as result of huge non-performing loans.
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