Mozambique’s national oil company appointed Lazard Frères SAS and Lion’s Head Global Partners as advisers to help raise as much as $2 billion to refinance its portions of two gas-development projects.
Empresa Nacional de Hidrocarbonetos EP will begin a roadshow next month to regions including Asia, the Middle East and South Africa, Chairman Omar Mitha said in an interview. Lazard will advise ENH on refinancing its portion of the project Anadarko Petroleum Corp. is developing, and Lion’s Head for the project Eni SpA is building, he said. It will engage Societe Generale SA to assist with refinancing for the Anadarko portion, he said.
“We need to put that in place,” Mitha, who is also chief executive officer of ENH, said in Maputo, Mozambique’s capital. “It’s extremely urgent.”
Mozambique is seeking to restructure $2 billion of commercial external debt, which it hasn’t made payments on since October 2016. The country is counting on large gas projects that Anadarko and Eni are building to help it repay the loans, and started talks with creditors last month in London. ENH has a 10 percent stake in Eni’s Area 4 project and 15 percent of Anadarko’s Area 1.
Lazard is also the government’s financial adviser on the debt restructuring, and the company’s role advising ENH will be complementary as it will give the firm “a clear sight of what’s happening at the projects,” said Mitha.
Making a Case
“It also helps make a case for the other financial institutions so that Mozambique can go back to the market,” he said. “There is a line of sight of how much money we will get in the coming future.”
ENH had initially depended on partners at the gas concessions to finance its portion of equity as it wasn’t able to raise the money itself at the end of 2014 because of poor market conditions amid a gas-supply glut. The market has since improved, and ENH is betting investors will see the projects as being less risky as progress has been made developing them and natural gas prices have rebounded.
ENH received World Bank support to hire the financial advisers as part of the lender’s Mozambique Mining and Gas Technical Assistance Project, Mitha said.