1st Apr 2015 13:30
LONDON (Alliance News) - Afren PLC Wednesday said the USD200 million funding that was agreed in principle earlier this month has been hit by a minor delay, but said it plans to finalise the deal "imminently".
On March 13, the oil company said it had entered into an agreement with some holders of its 2016, 2019 and 2020 notes, and with the majority of its lenders under its existing USD300 million Ebok credit facility, to secure interim funding and recapitalise the business.
Afren had said it reached a preliminary agreement with noteholders representing around 42% of the outstanding amount due under the 2016, 2019 and 2020 notes, for the provision of USD200 million in funding in the form of super-senior private placement notes, which were expected to be issued by the end of March.
However, on Wednesday Afren said the super-senior private placement notes have not yet been issued as anticipated, but said it expects to finalise the arrangements "imminently".
The company said the agreement would give it liquidity to give it more time to to "implement the required steps" to complete the recapitalisation with the Ad Hoc Committee and a majority of its lenders under its existing USD300 million Ebok facility. Afren said a deal has already been reached in principle.
The super-senior private placement notes have already been pre-placed with certain members of the Ad Hoc Committee, it added.
The deal with the Ad Hoc Committee, together with the company's lenders, represent more than 67% by value of the lenders under the Ebok facility, it said.
Afren said it will refinance the super-senior private placement notes by issuing USD321 million new high-yield notes, which would provide an additional USD100 million in cash proceeds to Afren.
It also will conduct a debt for equity swap. Afren said 25% of the 2016, 2019 and 2020 notes will be converted into equity with the remaining notes being reinstated and extended to 2019 and 2020 at an annual coupon of 9.1%, it said.
Due to the delay, Afren has agreed with the lenders of its USD300 million Ebok debt facility for a further deferral of the USD50 million amortisation payment which was originally due on January 31, until April 30.
The company said it will publish its 2014 results when the notes have been issued and will also announce the appointment of a new CEO.
Afren shares rose by 8.4% to 3.35 pence per share on Wednesday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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