Savannah Energy announces relationship agreement with NIPCO

Savannah Energy Plc announced Tuesday it plans to enter into a relationship agreement with its largest shareholder, NIPCO Plc, while terminating a previously approved share buyback program.

Under the proposed arrangement, NIPCO intends to increase its stake in Savannah to approximately 25per cent by acquiring 118 million shares that were originally earmarked for the company’s buyback program announced in October. 

NIPCO has also indicated plans to purchase additional shares from existing shareholders that could bring its total ownership to approximately 26.5per cent.

The relationship agreement will include provisions to ensure Savannah’s business independence and protect minority shareholders. Key terms include NIPCO’s commitment to support board-recommended governance resolutions, confirmation that NIPCO will have no board representation rights, and undertakings against hostile takeover attempts.

Savannah’s board determined that terminating the buyback agreement would preserve approximately £10.05 million in cash resources while providing “meaningful minority shareholder protections,” according to the press release.

Separately, Savannah’s CEO Andrew Knott plans to acquire the remaining 25.5 million shares that were subject to the original buyback agreement, which would increase his ownership to approximately 13.8per cent of the company’s issued share capital.

The company’s independent directors, having consulted with nominated adviser Strand Hanson Limited, consider the terms of these arrangements “fair and reasonable” for shareholders.

The relationship agreement is expected to remain in effect as long as NIPCO maintains at least a 12.5per cent stake in Savannah. The company anticipates finalizing the agreement following regulatory consultation.

Savannah Energy describes itself as a British independent energy company focused on delivering projects in Africa.