11th Aug 2015 14:04
LONDON (Alliance News) - Afren PLC, which delisted from the London Stock Exchange on Monday following significant financial difficulties, said Tuesday it is "working closely" with the company's joint venture partners to ensure its operations continue to run smoothly.
"The company and the administrators are now working closely with Afren's joint venture partners with a view to ensuring the continued functioning of its various operating businesses," it said in a statement.
"As part of this exercise the administrators are currently undertaking a review of all the assets within the group and have appointed The Blackstone Group International Partners LLP as financial advisors. Any parties interested in participating in potential asset sales arising from this exercise should contact Blackstone," it added.
The news signals the beginning of a sales process which will likely result in the company conducting a fire-sale in order to try to recover funds in order to repay its mountain of debt.
Embattled Afren entered administration on July 31, two weeks after its shares were suspended due to financial uncertainty.
AlixPartners was appointed as the company's administrator after a fall in production threatened its already controversial and much-debated restructuring plans aimed at saving the company.
Afren previously had said it expected to produce between 29,000 to 36,000 barrels of oil per day in 2015, but admitted that it had "become clear" the company wouldn't achieve the target, meaning it could not accurately inform the market about its financial position.
That also placed the restructuring plans with bondholders at risk, forcing Afren to ask for even more money on top of the substantial amount already needed to be injected and its mountain of debt.
The embattled company said it had exhausted all possible routes to save the company in a short space of time due to the company's dire liquidity issues, but said it failed to secure a revised refinancing and restructuring proposal that would result in Afren being able to pay its debts as they fall due.
The rather sudden collapse of Afren with administrators being appointed was a stark turnaround from the company's position in June, when it said there had been "no significant change in the financial or trading position of the group since March 31, 2015".
A small group of retail investors, the Afren Legal Action Group, wrote to AlixPartners via an open letter on Monday, citing numerous concerns about the transparency of the company and its future and asking for clarity on the company's current revenue and how much immediate liquidity is needed to make Afren solvent.
The trust between Afren and its shareholders had been fragile since October 2013 when former Chief Executive Osman Shahenshah and Chief Operating Officer Shahid Ullah were sacked for accepting unauthorised payments.
That was followed by failed refinancing deals, the collapse in the oil price and dwindled cashflow which wiped away Afren's equity value, as its share price fell by more than 98%, falling from 148.8 pence in July 2014 to 1.785p when its shares were suspended on July 15.
Afren's former Head of International Relations Simon Hawkins, who left the company in July, released a scathing attack on the company via social media on Monday after the final nail had been put in.
Hawkins spent two and a half years at the company and said: "As the company drifted closer and closer toward the black hole of insolvency, life became a string of shocking moments I never want to relive."
Earlier in 2015, SEPLAT Petroleum Development Co PLC made an approach for Afren which fell through in February as Afren believed the offer was unsatisfactory, stating the offer was "not in the best interests of shareholders".
By Joshua Warner; [email protected]; @JoshAlliance
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