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WFW advises Madagascar Oil on placing and open offer raising £49.5m with US$15m bridge finance facility

15 February 2013

Watson, Farley & Williams (WFW), a leading international law firm, has advised Madagascar Oil Limited (the Company) on a fully subscribed placing and open offer to existing shareholders raising £49.5 million (approximately US$78.4 million). The placing, in respect of which the Company received irrevocable commitments from existing shareholders for US$76 million, was subject to clawback to satisfy valid applications from existing shareholders under the open offer.

In conjunction with the financing, WFW also advised the Company on a US$15 million secured bridge finance facility provided by two of its major shareholders.

This follows WFW’s work in 2012, advising the Company on a placing to institutional investors to raise US$26.5 million.

Chris Kilburn, head of WFW’s London Corporate practice led the WFW team. He was supported by Gareth Burge and Sarah Williamson (Corporate), Michael Kenny, Iris Wong and David McElroy (Project, Commodities & Export Finance), Richard Stephens (Tax) and Anna Robinson (Employment).

Commenting on the deal, Chris Kilburn said: “Whilst we have been seeing a trend of companies in the natural resources sector turning to alternative forms of financing, such as the debt capital markets and royalty or streaming arrangements, it is encouraging to see an exploration company being able to raise significant equity finance from the market despite the current conditions.

We have been working with Madagascar Oil since its IPO and it should now be financed to move into an interesting phase in which it can complete the Tsimiroro Steam Flood Pilot and assess the potential of the Tsimiroro field.”

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