Category Archives: Loans & Repayments

Orca Exploration Group announced completion of the first tranche of investment

Orca Exploration Group announced on 16 January 2018 that the escrow release conditions have been met regarding the first tranche of investment by Swala Oil & Gas in the Orca Group. The definitive agreements for the US$130 million investment were released, and the first tranche is now complete.

Under the first tranche, the BVI Group sold 7.93% of shares that were held in PAE PanAfrican Energy Corporation to Swala (PAEM) Limited, a wholly-owned subsidiary of Swala, for US$25,782,250 (or US$21,022,450 net after some purchase adjustments), which is payable in US$17,055,950 cash and the right to receive either US$3,966,500 in Swala convertible preferred shares by 2 March 2018, or US$3,966,500 in cash if shares are not issued by that date.

Orca Exploration also entered into an amendment and consent letter with PanAfrican Energy Tanzania Limited (PAET) and International Finance Corporation (IFC), as part of the agreement. According to this agreement, PAET will prepay the IFC loan facility in part no later than 10 December 2019. As part of the amendment and consent letter, Orca guaranteed the prepayments owed by PAET to IFC. After the first tranche, BVI Group’s guarantee covers US$4,759,800 in prepayments, and would cover an aggregate of US$24,000,000 in prepayments due 10 December 2019.

Madalena Energy assigned convertible loan to BVI-based company

Canadian focused oil and gas company Madalena Energy Inc. made an announcement that Hispania Petroleum S.A. has assigned the convertible loan, provided by Hispania to the company, to KD Energy International Capital Limited, incorporated in the British Virgin Islands.

The Canadian company has provided its consent to the assignment, which is required pursuant to the terms of the Capex Loan, as the assignment was undertaken by Hispania and BVI-based KD Energy for succession planning of holding of all of the issued and outstanding common shares of each Hispania and KD Energy.

Under the terms of the loan, KD Energy will acquire or have the possibility to acquire more
than 20 per cent of the outstanding common shares in the capital of Madalena and become the control person of the company. It is expected that Madalena shareholder approval for the transaction will be sought at the company’s upcoming annual meeting of shareholders.

British source provides financial overview of BVI banking sector

According to the study made by British company Capital Economics and funded by the BVI government, the banks operating in the jurisdiction are owed US$919 million which are loans to the customers, and more than 90 per cent of the customers are from the BVI territory.

The report stated that there are six deposit-taking licences issued by the regulatory authority, and banking services are mostly limited to deposit taking and direct lending. The sources of most part of deposits into the BVI banks are domestic. Along with customer deposits, which made about 66% of funding on the BVI banking balance sheet in 2015, there are US$189 million of interbank deposits and US$623 million of issued debt, shareholder’s equity and other instruments. As at September 2015, the BVI banking system has US$2.4 billion in assets.

Capital Economics reported that much of the funding collected by BVI banks goes to their Caribbean and Latin America’s parents operations, so BVI is providing liquidity in US dollars to the neighbouring economies.

The banking sector of the British Virgin Islands employs 270 people. In 2016 it contributed US$34 million in gross value added, and paid US$5 million in taxes.

Kennecott Exploration provided unsecured loan to Talon Metals Corp.

BVI-registered Talon Metals Corp. announced that it has received the unsecured loan in the amount of US$4,000,000 from Kennecott Exploration Company, which is a subsidiary of the Rio Tinto Group. The unsecured loan will be used by Talon Metals to continue to fund exploration activities at the Tamarack Project in Minnesota, USA. The maturity date of the loan is December 21, 2015. The loan will bear interest at the rate of LIBOR plus 8 per cent per annum.

Talon Metals and Kennecott have agreed on the deferral of a US$2,500,000 option payment due by the BVI corporation to Kennecott on June 26, 2015, under the terms of the Exploration and Option agreement signed on June 25, 2014, until December 21, 2015. Also, Kennecott will not make further cash calls beyond the amount of the loan, until the fourth quarter of this year.

Kennecott and Talon have started planning for the next phase of exploration at the Tamarack Project.