Stanbic IBTC and South Africa’s Standard Bank Group, will provide a new accordion facility to Eland Oil & Gas. The credit facility will see the oil firm increase its borrowing base to $50 million.
The loan is being underwritten by Stanbic IBTC and Standard Bank, while Stanbic IBTC Capital Limited would act as a joint book runner. The partnership is in line with its resolve to enhance business growth and expansion.
An accordion facility is essentially an incremental facility, which allows a borrower to take an additional facility over and above what was originally agreed with the financier on the same terms as the original facility for expansion purposes.
The facility can also be interpreted as a provision that allows a borrower to expand the maximum allowed on a credit line or add a term loan to a credit agreement. An accordion may also be known as an incremental facility.
In November 2018, Eland Oil & Gas announced that it had successfully refinanced its existing reserve-based lending facility with a new five-year syndicated RBL facility in an amount of $75 million, with the option to increase it to up to $200 million through an accordion, subject to incremental production and reserves.
Eland Oil & Gas also said that following a re-determination, the borrowing base amount increased from $103 million to $134 million and an initial accordion increase of $50 million was being underwritten by Standard Bank of South Africa and Stanbic IBTC Bank Plc, resulting in the commitments under the facility increasing from $75 million to $125 million.
Eland Oil & Gas Plc, together with its subsidiaries, engages in development, exploration, and production of oil and gas properties in West Africa.