Diversified Energy Company PLC (LON:DEC, NYSE: DEC) has announced that it has closed an innovative transaction that has allowed the Company to unlock additional value from its current asset base at an attractive multiple while further enhancing liquidity and reducing leverage.
In summary, the Transaction consisted of the Company executing a sale of producing assets in Appalachia to a Special Purpose Vehicle (“SPV”; DP Lion Equity Holdco LLC) in which Diversified retained a 20% minority interest and operatorship of the Assets. The Transaction generated proceeds to the Company of approximately $200 million, comprised of an Asset Backed Securitization placed at the SPV and a sale of an 80% equity interest in the SPV for approximately $30 million. Proceeds (net of transaction-related costs) were used to repay outstanding borrowings under the Company’s Sustainability-Linked Loan (revolving credit facility), resulting in an approximate 12% reduction in net debt, and for general corporate purposes.
