13th May 2016 07:05
LONDON (Alliance News) - Circle Oil PLC Friday said the company's cashflows and financial position remains "under significant pressure" and reiterated its need for more sustainable payments from Egypt's state-owned oil company.
Circle Oil shares were down 12% to 1.99 pence per share on Friday morning.
The company produces gas and condensate in Egypt which is sold to state-owned Egyptian General Petroleum Corp, but Circle Oil has been working on the commercial terms of those payments since last year and has failed to strike a deal as of yet.
Due to the "uncertainty and irregularity" of the payments from Egypt, Circle Oil is having to extract funds from its Moroccan operations and rely on its lenders providing further repayment extensions.
International Finance Corp provided Circle Oil with another extension on Friday, giving Circle Oil until May 27 to repay the amounts due under the reserve-based lending facility. There is a good chance further extensions will be granted if the company remains in trouble, as the lender has said it is willing to consider future waivers.
The facility provided by the creditor, which is the World Bank's private sector lender, was drawn to USD57.5 million back in March.
One of the reasons International Finance Corp is providing extensions is because Circle Oil is currently conducting a strategic review which could potentially lead to the sale of the business.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Circle Oil Plc