http://www.4-traders.com/SWALA-ENERGY-LTD-12819174/news/Swala-Energy-Ltd--Nyanza-oil-explorer-valued-at-Sh27bn-ahead-of-Dar-IPO-17811000/
"Swala Energy, an Australian oil and gas explorer prospecting for crude deposits in Nyanza, has earned Sh256 million (Australian $3.3 million) from sale of a 10 per cent stake to an Abu Dhabi-based investment firm.
Swala Energy sold the stake to the Hayaat Group to raise cash for financing exploration, which includes seismic studies on block 12B located in Nyanza.
"The principal investment has been taken up by the Hayaat Group, a private investment company in Abu Dhabi who subscribed for $3.3 million. Following the placement, the Hayaat Group will own 9.4 per cent of the company and will nominate one director to join the Swala Board," said Swala in a statement.
Swala is also planning on doing further exploration on blocks in Tanzania and Zambia, where it also has operations.
The sale values the prospecting firm at Sh2.73 billion ahead of its planned listing on the Dar-es-Salaam Stock Exchange (DSE).
The seismic work on the Kenyan block is expected to begin this month, with the data being used to pin-point the best spots for drilling. Swala co-owns interest on the block with UK-based Tullow Oil, which has discovered commercial deposits in northern Kenya.
READ: Tullow Oil partner to list shares on Tanzania exchange
Management had earlier said that the information memorandum will be out once approval by the Tanzania'sCapital Markets and Securities Authority (CMAC) is given.
Swala has got CMAC's approval for the IPO but has said that the information memorandum is being finalised for publication.
"We should have an English version and a Kiswahili version ready in a few weeks' time," Swala chief executive David Mestres Ridge told the Business Daily.
No bank loans
An investor presentation says that Swala is planning to raise between Australian $2 million (Sh155 million) and $3 million (Sh233 million) by selling shares in Swala Oil & Gas (Tanzania) Limited, its subsidiary in the neighbouring country.
Petroleum and mineral analysts say the IPO is crucial for the explorer since commercial banks do not lend at the exploration stage due to the high level of risk involved.
Simba Energy, EHRC Energy, Taipan Resources have all announced deals worth at least Sh3 billion in the past one month, all of which involve selling equity stakes to bigger firms.
The sales of equity stakes have been made to accommodate larger companies that have both the technical expertise and enough funds needed to move to the next stage of seismic studies and drilling of wells."
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