Case Studies

Creating cross border systems necessary to raise equity and sell a division

When Spyker Energy, the oil and gas exploration company, embarked on an initiative in 2011 to raise funds to develop projects in Denmark and Holland, on and off-shore, founder and chairman Willem van’t Spijker, decided that he needed a CFO, ideally with IPO and oil & gas industry experience.

The former drilling engineer, who had more than 40 years in the energy business including oil production activity in Tunisia, had acquired licences in Holland and Denmark, and needed constructive advice and practical help in the preparation of the business for an AIM quotation.

The oil and gas exploration industry is one of international opportunities, a variety of partners around the globe, requiring long-term business models, and specialists in geology and engineering.

Though the IPO was abandoned due to market conditions, the marketing effort, supported by the listing material (the Admission Document, the Working Capital Projections, the Financial Reporting Procedures) raised sufficient interest from private equity and high net worth individuals to generate enough funding for the company to go forward with its plans to conduct exploration and to develop existing licences.

Jim Halliday, a Client Finance Director with FD Solutions, recalls “I came in at a late stage – at the time of the AIM initiative. My role was to compile the financial model, resolve IFRS conversion issues with the historical financial information, and to work with the NOMAD (nominated adviser), reporting accountants and lawyers to finalise the Admission Document and presentation material”.

As a result of Jim’s efforts during the initial four-week engagement, the Chairman asked him to stay on to become the Finance Director for this multinational group.

At the end of 2011, having made two discoveries in offshore Denmark, while the company was preparing to drill a well in Holland, it received an offer for its Dutch assets. Following much deliberation, a decision was taken to accept the offer.

A period of due diligence and negotiations ensued in which Jim worked alongside the CEO to achieve a satisfactory Sale & Purchase Agreement. Spyker’s Dutch subsidiary was recognised by the Dutch Government as an ‘operator’, offering an intrinsic value to purchasers. An operator carries out and controls a programme of work, agreed with and accountable to partners, and has demonstrable technical and financial expertise, required by the Dutch authorities.

Jim became a regular at Schiphol airport, as he reorganised the financial management of the Dutch joint venture operations, negotiating and agreeing with partners a more robust methodology to allocate indirect costs, and instituting a monthly billing process to minimise cashflow fluctuations. These industry standard processes and attention to housekeeping helped facilitate the sale of the Dutch company.

When the incumbent Dutch bookkeepers retired, Jim located a Dutch accountancy firm, whose staff he trained in oil industry accounting practices, to take on the role. This outsourcing of the finance department was based on using a cloud-based accounting system enabling Jim to review accounting from his own desk in the UK.

The use of a Dutch bank’s internet banking facilities enables payments to be authorised by Willem and Jim from anywhere in the world. As a result, with the Danish subsidiary being a subsidiary of a Dutch holding company, and with the assistance of a Danish accountancy firm providing supporting services, the international operation runs smoothly and efficiently, despite the geographical separations of directors and personnel.