Syntaxis backs Romanian oil and gas services group

The Vienna-headquartered, Central and Eastern Europe-focused mezzanine fund manager has backed Romanian group Expert Petroleum in the latest deal from its second fund.

Syntaxis Capital has underwritten an €11.7 million mezzanine loan in support of the management buyout and subsequent expansion of Romanian oil and gas services business Expert Petroleum, the firm said in a statement on Friday.  

Syntaxis made the investment from its second mezzanine fund, a €125 million vehicle raised in 2011. This deal is the fund’s fifth. 

Expert Petroleum works with established oil and gas companies to help them increase production on their marginal and mature fields by introducing new technologies and improving operational efficiency.  

Alexksander Majewski, a director at Syntaxis responsible for the deal, said: “It was a typical Syntaxis structure: an equity component in the form of warrants, and a mezzanine loan with a variable redemption premium that locks in a contractual return of 11 percent per annum. It’s a four to six year investment for us.” 

Syntaxis partner Thomas Spring said Expert Petroleum had approached them about the financing. “There were other lenders in the mix providing competition, but it was gratifying that our reputation meant we were invited to submit a proposal and were subsequently chosen to provide the buyout and expansion financing,” he said.  

“Appetite for mezzanine in the region is still strong,” Majewski added. “There’s less private equity dry powder in the region as some firms haven’t returned to market, but the leading groups are still active and we’re in dialogue with them about a number of opportunities.”  

Macfarlanes and Deloitte advised Syntaxis in London, with CMS Cameron McKenna and Spenco advising the firm in Romania.