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Citadel Capital divests non-core investments

CAIRO, Egypt, Jan 10 – Egypt-based investments firm Citadel Capital has started offloading some of its non-core assets with the sale of 100 percent of its interests in National Petroleum Company of Egypt (NPC Egypt).

Citadel’s Opportunity-Specific Fund through Golden Crescent Investments signed a share purchase agreement with Sea Dragon Energy, an exploratory and development company which will take up the business.

Sea Dragon has agreed to pay share consideration equal to Sh1.2 billion. Concurrent with the execution of the share purchase agreement, Sea Dragon has delivered Sh217 million into escrow as an initial deposit against the payment of the cash consideration.

“This is the first of several transactions to which we have alluded in recent months that will see Citadel Capital rationalise its portfolio through the divestiture of some non-core investments,” said Citadel Capital Chairman and Founder Ahmed Heikal.

At the closing of the transaction, GCI will be granted a 20 percent after-payout net profit interest from production attributable to a field comprising part of an existing NPC Egypt development asset that Sea Dragon expects to bring onstream during the first quarter of 2013.

Cash proceeds from the sale will allow Citadel Capital to recoup additional funding it has extended to GCI over and above the firm’s equity investment, with the balance remaining to be distributed pro-rata among the remaining GCI lenders. Citadel Capital owns 15.05 percent of Golden Crescent Investment with management control; the balance of Golden Crescent Investment equity is held by limited partners.

“We are maximising upside potential for Citadel Capital. Sea Dragon is headed by a world-class management team that has proven experience in the region’s upstream segment,” Heikal noted.

Under the share purchase agreement, Golden Crescent is entitled to designate one nominee for election to Sea Dragon’s Board of Directors for as long as it holds no less than 10 percent of Sea Dragon’s issued and outstanding common shares.

The share purchase agreement also provides GCI with pre-emptive rights, subject to certain exceptions, to purchase or subscribe for additional common shares of Sea Dragon to maintain its pro rata equity percentage in Sea Dragon, as well as certain prospectus.

Subject to the satisfaction or waiver of all conditions set out in the share purchase agreement, Golden Crescent and Sea Dragon currently anticipate closing the transaction in late February or early March 2012.

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