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Mercuria bails Aegean out with $1 billion credit

05 Jul 2018

International marine fuel logistics company Aegean Marine Petroleum Network (Aegean) Thursday entered into a Memorandum of Understanding (MOU or the Agreement) with independent commodities and energy group Mercuria Energy Group.

The development spells positive news for Aegean who was facing several class action complaints from several law firms after uncovering a $200 million account discrepancy.

Under the terms of the Agreement, Mercuria intends to provide a US$1 billion trade finance facility intended to support Aegean’s existing U.S. and global revolving credit facilities.

Mercuria will also provide increased liquidity to Aegean of not less than US$30 million, adding flexibility to Aegean’s operations.

Upon closing of the trade finance facility, the Aegean will issue new shares equal to 30% of its common stock (on a pro-forma basis) to Mercuria and will invite a representative of Mercuria to join the Company’s Board of Directors.

“As part of the announced strategic review, the new leadership at Aegean has, in short order, brought forward an opportunity to completely redefine and optimise the company’s capital structure, enhance near term liquidity and position the company for a dynamic partnership with one of the world’s largest privately held integrated energy and commodity groups,” said Aegean Chairman and independent director of the Board, Donald Moore.

“We are extremely pleased to enter into this Agreement with Mercuria and look forward to working with them on a broader relationship, for the benefit of our respective stakeholders.

“Importantly, the agreement provides for immediate credit support from Mercuria for the benefit of Aegean’s banks, customers, suppliers, and logistics providers, putting the strength of one of the world’s largest independent energy and commodity companies behind Aegean.”

The Agreement also considers a potential broader strategic partnership between Aegean and Mercuria, including operational services, trading and hedging arrangements, and other support provided by Mercuria to Aegean.

Mercuria has the exclusive right to complete the trade finance facility by August 15, 2018, and to pursue the strategic partnership transaction until January 31, 2019, subject to specified exceptions and termination events.

“We look forward to further developing our relationship with Aegean and providing the flexibility to execute a strategy that enhances the Company’s operations and positions the Company for long-term success,” said Magid Shenouda, Mercuria’s Global Head of Trading.

The transactions between Aegean and Mercuria are subject to final documentation and regulatory analysis, and there can be no assurance this will be completed.

Moelis & Company is serving as financial advisor and Kirkland & Ellis LLP is acting as legal advisor to Aegean with respect to the transaction. Milbank, Tweed, Hadley & McCloy LLP is acting as legal counsel to Mercuria in connection with the transaction.

Related: Ocean Intelligence comments on Aegean credit downgrade
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RelatedAegean audit uncovers $200 million account discrepancy
RelatedAegean unfolds several business developments
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RelatedAegean requests for ‘additional time’ to file annual report
RelatedAegean welcomes new Chief Financial Officer
RelatedLawsuit filed against Aegean’s H.E.C. acquisition
RelatedAegean to offer ‘one-stop-shop solution’ with H.E.C. acquisition
RelatedAegean in $367 million acquisition of port reception facilities services group
RelatedAegean shareholders ‘gravely concerned’ over board’s silence
RelatedShareholders nominate ‘highly qualified’ candidates to Aegean board
RelatedAegean Marine Petroleum Network under shareholder pressure

Published: 5 July, 2018
 

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