Samroc to buy DRC oil firm for R516,9m as its ditches mining focus

JSE-listed Samroc, which is ditching mining for Democratic Republic of Congo (DRC) oil concessions, said on Wednesday that it had agreed to buy South Africa Congo Oil Company (SacOil) in a R516,9-million cash and share reverse takeover.

It said in February that it was planning to buy SacOil, also taking up its name.

Samroc would now conduct a due diligence on the DRC firm's assets, and put the takeover to shareholders, it said in a note to the JSE.

"The objective of the transaction is to reverse SacOil into a listed vehicle, so as to enable SacOil and its partners to effectively fund an exploration and development programme in the Albertine Graben area," the firm stated.

The company would sell its mineral assets into a dormant subsidiary Bushveld Pioneer, which it would list separately on the Johannesburg bourse. It said that it was in advanced talks to this end.

In terms of further agreements, Samroc advanced a total amount of some $3,5-million, payable direct to the DRC government "in lieu of signature bonus obligations for the oil concessions".

"The loans advanced are secured by pledges and sureties normal for a transaction of this nature. On the conclusion of the acquisition, the amounts advanced will be extinguished," Samroc said.

The agreement to buy SacOil was dependent on a list of conditions being fulfilled by the end of May, including the due diligence, approvals for listing new shares on the JSE, and the assignment to SacOil of all rights in respect of the oil concessions.

"The current initiative is intended to pursue a strategy that will translate Samroc into a pan African controlled oil and gas focused company with exploration and, in time, oil and gas producing assets in Africa," said the company.

Samroc said previously that it had applied to the JSE that its listing be shifted to the bourse's Oil & Gas sector, where it would join Oando and Sasol.