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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Mercuria in MoU with Aegean to provide $1bn refinancing and secure 30% stake

MoU also covers broader partnership, including operational services, trading, hedging and other support.

Image credit: Aegean Marine Petroleum

Updated on 05 Jul 2018 12:45 GMT

Mercuria Energy Group has entered into a memorandum of understanding (MoU) with Aegean Marine Petroleum Network Inc. to support the NYSE-listed bunker firm's existing credit facilities and explore a strategic partnership.

Under the terms of the agreement, Mercuria intends to provide a $1 billion trade finance facility to bolster Aegean's existing U.S. and global revolving credit facilities.

Mercuria is to also provide increased liquidity to Aegean of not less than $30m.

Upon closing of the trade finance facility, Aegean is to issue new shares equal to 30 percent of its common stock (on a pro-forma basis) to Mercuria and invite a representative of Mercuria to join its board of directors.

The agreement also contemplates a potential broader strategic partnership between the two firms, including operational services, trading and hedging arrangements, and other support by Mercuria to Aegean.

Mercuria has the exclusive right to complete the trade finance facility by August 15, 2018, and to pursue the strategic partnership transaction until January 31, 2019, subject to specified exceptions and termination events.

Commenting on the news, Aegean chairman and independent director of the Board, Donald Moore, said: "As part of the announced strategic review, the new leadership at Aegean has, in short order, brought forward an opportunity to completely redefine and optimize the company's capital structure, enhance near term liquidity and position the company for a dynamic partnership with one of the world's largest privately held integrated energy and commodity groups. We are extremely pleased to enter into this Agreement with Mercuria and look forward to working with them on a broader relationship, for the benefit of our respective stakeholders."

Moore added: "Importantly, the Agreement provides for immediate credit support from Mercuria for the benefit of Aegean's banks, customers, suppliers, and logistics providers, putting the strength of one of the world's largest independent energy and commodity companies behind Aegean."

Magid Shenouda, Mercuria's Global Head of Trading, commented: "We look forward to further developing our relationship with Aegean and providing the flexibility to execute a strategy that enhances the Company's operations and positions the Company for long-term success."

Aegean's financial advisor with respect to the transaction is Moelis & Company, whilst Kirkland & Ellis LLP is acting as legal advisor.

Mercuria's legal counsel is Milbank, Tweed, Hadley & McCloy LLP.

Related Links:

Class action lawsuit filed by Aegean shareholder against the company, former president and ex-CFO
Aegean expects to write off $200m and take legal action
Aegean appoints chairman, but no 2017 report until after Audit Committee review
Aegean reaches settlement with RBM to dismiss litigation, appoints three board members
The Aegean board U-turn: From founder's son to shareholder group nominees in 71 days
Aegean Marine Petroleum S.A.

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