Savannah Energy PLC, the British independent energy company focused on delivering key projects across Africa, has announced plans to enter into a Relationship Agreement with its largest shareholder, NIPCO Plc, a diversified Nigerian energy conglomerate, amid NIPCO’s intention to increase its stake in the company.
Under the arrangement, NIPCO proposes to acquire 118,083,927 of the 143,565,582 ordinary shares previously subject to an off-market share buyback agreement, boosting its ownership to roughly 25% of Savannah’s issued share capital. NIPCO may also acquire an additional 1.5% through further secondary market transactions, potentially increasing its holding to 26.5%.
The proposed Relationship Agreement is designed to protect Savannah and its minority shareholders, ensuring the company’s operational independence.
Key provisions include NIPCO’s commitment to support board-recommended governance resolutions, no right to board representation, restrictions against hostile takeovers, and orderly market disposal obligations for any future share sales.
The agreement would remain in effect while NIPCO holds at least 12.5% of Savannah’s issued shares.
The Board of Savannah Energy cited strategic benefits in terminating the buyback, including enhanced minority shareholder protections and preservation of approximately £10.05 million in cash, strengthening financial flexibility.
Also, CEO Andrew Knott plans to acquire the remaining 25,481,655 shares not purchased by NIPCO, increasing his stake to 13.8% and further aligning senior management with shareholder interests.
Independent directors, after consulting with the company’s nominated adviser Strand Hanson Limited, deemed the arrangements fair and reasonable for shareholders.