Citadel Capital in $147m oil and gas sale

The Egyptian private equity firm announced the sale of the National Petroleum Company Egypt to Canada's Sea Dragon Energy. The sale is being done through Citadel's Golden Crescent Investments portfolio.

Egypt-based Citadel Capital is shedding its 100 percent stake in the National Petroleum Company Egypt, an upstream oil and gas company, to Canadian exploration and development company Sea Dragon Energy. 

Sea Dragon, headquartered in Calgary, is purchasing the holding – a non-core asset in the Citadel portfolio – in a $147.5 million cash and stock transaction. The deal is part of a portfolio rebalancing and marks the first in an anticipated series of sales of non-core assets. It is expected to close during the first quarter of the year.

The purchase is structured as a $60 million cash payout coupled with 350 million common shares of Sea Dragon, which will be issued to Golden Crescent Investments, a Citadel Capital opportunity-specific fund, upon completion of the deal based on $0.25 per share. Already, Sea Dragon has directed $2.5 million into an escrow account to serve as a deposit for the cash portion of the payment.

“This is the first of several transactions to which we have alluded in recent months that will see Citadel Capital rationalise its portfolio through the divestiture of some non-core investments,” commented Dr. Ahmed Heikal, Citadel Capital chairman and founder, in a press release.

Citadel has a 15.05 percent stake in Golden Crescent and possesses managerial control of the vehicle. The firm expects that shareholders will benefit from the newly acquired equity stake in addition to after-payout net profits interest, according to the company statement.

Additionally, as part of the transaction, Golden Crescent has obtained the right to select a nominee for the Sea Dragon board of directors but, to remain eligible, the investment firm’s equity position must not exceed 10 percent of the holding’s issued and outstanding common shares.

Late last year, Citadel revealed its intention to raise millions of dollars in small divestitures and also secured a $150 million financing facility provided by the United States Overseas Private Investment Corporation (OPIC), a government agency.