Yorkville Advisors, the alternative investment firm, has completed its 20th standby equity distribution agreement, a proprietary equity financing, for 2010.
This transaction was an AUD25m (USD23m) facility with Australian Stock Exchange listed New Guinea Energy, a company focusing on oil and gas exploration in Papua New Guinea.
It represents the fourth oil and gas standby equity distribution agreement since the beginning of the year.
Pioneered nine years ago by Yorkville, a standby equity distribution agreement aims to offer companies a flexible and cost effective way of raising capital in pursuit of their growth strategy. The terms enable an investee company, at its discretion, to raise funds in tranches by issuing new equity based upon market price at each drawdown over a defined commitment period.
The oil and gas sector is one of Yorkville’s core sectors for investments in 2010. This sector currently represents 20 per cent of new investments this year, up from a total of ten per cent overall in 2009.
By country, Yorkville has entered into the largest number of equity line facilities in Australia, with five completed so far this year. The second and third biggest countries for Yorkville were Canada with four and the US with three.
Yorkville has expanded the number of countries where it has completed standby equity distribution agreements to include Sweden and has now entered into this type of financing in 16 countries since starting to offer it in 2001.
Other countries it completed standby equity distribution agreements in 2010 include Germany, England, Norway and Singapore.
Mark Angelo, chief executive of Yorkville, says: “To date in 2010, Yorkville continues to see an incredibly strong deal flow and the enormous popularity of the SEDA as companies seek to raise equity without compromising their capital structure. We entered into a total of 40 SEDAs in 2009, up from 12 in 2008. With 20 SEDAs already arranged in 2010, we are well on our way to completing an even larger number this year and we continue to look for great companies and management teams to partner with through this financing.”