ADM Energy (ADME) announced on Monday it entered into a non-binding memorandum of understanding with commodities giant Trafigura to develop investment opportunities in the African energy sector.
The Agreement sees ADM Energy originating, analysing, developing and negotiating potential projects, presenting them to Trafigura, who may provide financing or be a trading counterparty.
Trafigura will then potentially finance up to $100 million for approved projects, with the option to subscribe to up to $20 million in convertible loan notes in ADM Energy.
Osamede Okhomina, CEO of ADM, said: "I have enjoyed a long relationship with Trafigura and this Memorandum of Understanding is an endorsement of the Company's strategy, signalling a new stage of development for ADM.”
He added: “We have identified a number of excellent investment opportunities in Nigeria and West Africa. With our extensive network, and the potential access to capital this MOU gives to ADM, we believe the Company is well positioned to capture future opportunities."
ADM Energy shares jumped 12.35% to 4.55p during Monday morning trading
Trafigura, legally headquartered in Singapore, is one of the largest physical commodities trading groups in the world, reporting $171.5 billion in revenue in 2019.
James Josling, Head of Africa Energy Trading for Trafigura, said: "Trafigura has been active in Africa for more than 20 years, helping African producers and refiners of oil, metals and minerals finance their operations, manage their exports and ultimately connect with their end customers around the world. “
“Today's signing shows our intention to work with an upstream investing company that has strong roots in Nigeria and West Africa, and is well placed to develop its potential while being committed to practicing good corporate governance as evidenced by ADM's London quotation."
Trafigura also operates its own investment arm, Galena Asset Management, which finances projects through Private Equity Funds and Private Investments.
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