Tuesday, August 26, 2014

Challenger Limited announces the closing of a major international partnership deal

Posted on
Monday, 14 January 2008

Industry Sector


Venture Capital Bank

Press Release Content

Challenger Limited announced today that it has reached a definitive agreement with Bronco Drilling Company, Inc. whereby Bronco acquires a significant stake in Challenger Limited in return for a combination of in-kind and cash contributions from Bronco. The Challenger shares acquired by Bronco are all newly-issued and will amount to 25% of Challenger's total issued and outstanding shares on fully diluted basis.

Bronco's in-kind contribution consists of six, different-capacity, land drilling rigs and ancillary equipment. Five of the contributed drilling rigs come from Bronco's existing marketed fleet and one rig is newly constructed by Bronco for the purpose of this transaction. This major partnership deal between Challenger and Bronco comes only one year after Venture Capital Bank (VC Bank), a Bahrain-based Islamic investment bank, and its partner, the US private equity firm Global Emerging Markets (GEM), made a sizable private equity investment in the MENA-based oil drilling contractor.

Challenger Limited is a company incorporated and organized under the laws of the Isle of Man, with branch offices in Libya, Egypt, and UAE, and a subsidiary company in Saudi Arabia. Challenger Limited currently owns and operates a premium fleet of 23, different-capacity, land drilling and work-over rigs, which at the moment, are all contracted for operations in Libya.

Challenger Limited, a prominent provider of contract oil, gas and water land drilling and work-over services, has over 15 years experience in providing services to major and independent oil and gas companies. Over that period of time, Challenger Limited has been operating in; Libya, Egypt, Tanzania, Gabon, and the Republic of Niger. The company has a strong client base, including nearly all state-owned and major oil companies in Libya, as well as International players such as Agip/Eni, Total, Marathon, IPL, Veba and Verenex Energy.

Mr. Hassan Tatanaki, Chairman of Challenger Limited, declared that " In view of the vast opportunities of high growth in the MENA region, we along with our partners have decided to go into partnership with one of the best-regarded companies in the oil drilling industry; namely Bronco Drilling Company. This partnership will energize and undoubtedly increase our capacity to expand Challenger activities in both scope and scale. This was based on our full confidence and faith in the investment model and general direction". Mr. Tatanaki said that "This transaction shows that the growing cooperation amongst Libya, the U.S., and the Middle East, is creating an attractive investment environment for U.S. and International companies".

Mr. Tatanaki went on to say "We are very happy that Challenger has attracted foreign investments into Libya, especially from a prominent company in the oil industry like Bronco. We are very proud of this partnership and strongly believe that it will be the starting point for many other foreign investments to be made in the services sector in Libya".

In conjunction with these partnership transactions, it was agreed that Challenger will acquire four additional land drilling rigs and ancillary equipment from Bronco to be paid for in installments. Challenger and Bronco also agreed to enter into a number of services and management agreements under which Challenger will engage Bronco to provide broad-based technical and managerial support services bringing more International expertise to the already International name of Challenger Limited.

Frank Harrison, Chief Executive Officer of Bronco stated, "We have been diligently working on expanding the company internationally and are very pleased to have reached this agreement with Challenger. This transaction allows us to deploy a portion of our fleet abroad that is not ideally suited for the unconventional drilling which dominates activity in the United States and also provides the company greater exposure to oil. The MENA area has become a region of tremendous growth and opportunity and we are excited about participating in its potential. We are confident that the combination of Bronco and Challenger will create a formidable contractor in the MENA market and beyond."

"We are very pleased to announce this transaction as it confirms VC Bank's objectives of enhancing the capabilities of regional companies and contributing in their growth plans. We have invested in Challenger a year ago through the MENA Small & Medium Enterprises Fund and have been working closely with the management of Challenger to achieve its targets. Therefore, we believe that this deal with Bronco will create a significant value to our investors and help the company seize the exceptional growth potential in Libya and will allow it to enter international markets" said Challenger's Vice Chairman and VC Bank Chief Executive Officer Abdullatif Mohammed Janahi. "Soaring oil prices have brought about a supply/demand imbalance of oil rigs worldwide, leading oil and gas companies to spend more on exploration and production. This has, in turn, increased demand for oil drilling contractors such as Challenger." Mr. Janahi added.

Notes and contacts

About Challenger Limited
Challenger Limited is a private company limited by shares incorporated and head-officed in Douglas, Isle of Man, with its regional for the MENA region located in Cairo, Egypt. Challenger Limited is an International provider of contract oil, gas and water land drilling and workover services, servicing both major and independent oil and gas companies with a premium fleet of 23 land rigs. The company is one of the leading providers of drilling and work over services on the African continent, and is currently expanding its market presence to include other areas in the Middle East region. The current shareholders of Challenger are Challenger Group Limited, a Bermudan holding company wholly owned by the Tatanaki family, and MENA Small and Medium Enterprises Fund, which is managed by Venture Capital Bank, Bahrain. For more information about Challenger Limited, visit http://www.challengerlimited.com.

About Bronco Drilling
Bronco Drilling Company, Inc. is a publicly held company headquartered in Edmond, Oklahoma, USA and is a provider of contract land drilling and workover services to oil and natural gas exploration and production companies. Bronco's common stock is quoted on The NASDAQ Global Market under the symbol "BRNC". For more information about Bronco Drilling Company, Inc., visit http://www.broncodrill.com.

About Venture Capital Bank

Venture Capital Bank - is the Middle East and North Africa's (MENA) first specialist venture capital and private equity bank regulated by Bahrain Monetary Agency (BMA) with a paid up capital of USD 165 million and a GCC widespread shareholder base comprising 80 high net worth individuals and corporate investors. VC-Bank, headquartered in Bahrain, is a shari'ah-compliant investment bank whose focus is to invest in fundamentally-strong, undervalued, finance-seeking small to medium enterprises (SMEs) with market and revenue growth potential, in addition to a vast array of specialized and themed real estate investment opportunities with economic and social value addition dimension.

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