Shoreline, a power solutions company incorporated in Nigeria and operating throughout the Sub Saharan Africa region, recently announced that it is planning to issue bonds worth of USD 2 billion to buy crude and gas assets in Tanzania and Equatorial Guinea.
In an interview with Bloomberg Business, Shoreline Group’s CEO, Mr. Kola Karim, explained that the debt issue will be executed in three different rounds, with the first one to happen in 2015, via Eurobonds with maturities of five to seven years.
Regarding to the interest rate to be paid, as happens with every emission, the risk qualification awarded will be determinant of the debt’s cost, however, it might be aligned with Nigerian Corporate Debt rates, he added.
The planned purchases throughout the debt issue, are seeking to profit from the energy deficit in the East African Community (EAC), where homes and businesses rely on generators rather than in power grids yielding to interrupted power supply and higher business costs.
Based on analysis of publicly information on other corporate bonds from the same sector in Africa, the return on Shoreline’s Eurobonds is expected to be within the range from 8% to 9%, down from above 11% in January.