14th Dec 2015 08:18
LONDON (Alliance News) - Circle Oil PLC shares fell in early trade on Monday after the company said progress on its new financing deal had been slower-than-expected, leaving it scrambling to shore up its position.
The company reached a deal with International Finance Corp in November to extend its reserve-based lending facility, but progress on securing this financing has been slower than Circle had originally envisaged.
Circle said despite the low cost of its operations, trading remains very challenging for the business due to the further weakening in global oil prices and varying production levels from its NW Gemsa project in Egypt.
Due to the continued problems the company has faced, the borrowing base for the reserve-based lending facility from the IFC is set to be reduced, leaving a moderate shortfall in Circle's funding.
It is therefore actively considering options, including issuing equity or restructuring its debt in order to shore up its finances. It expects to undertake any transaction to achieve this by the end of the first quarter of 2016.
Circle shares were down 27% to 2.71 pence on Monday morning, the worst performer in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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