1st Dec 2020 12:36
(Alliance News) - Echo Energy PLC on Tuesday said it has entered a debt restructuring agreement with Swiss investment company Lombard Odier Asset Management Ltd to conditionally restructure its EUR5.0 million 8% secured convertible debt facility.
The Latin American upstream oil and gas company's debt facility terms include the maturity being extended by three years so that it will mature on the last day of business in April 2025. No further cash interest payments are due prior to the maturity date, and the principal of the debt facility is repayable in five quarterly instalments of EUR600,000 starting from March 2024, with the balance repayable on the maturity date.
Echo Energy said that as part of the new debt facility agreement terms, it will cancel the 74.2 million warrants to subscribe for new Echo Energy shares that were granted to Lombard Odier when the debt facility was first put in place. These will be replaced by 74.2 million new warrants, with the lower exercise price of 0.3 pence per share.
Echo Energy also announced the successful completion of an equity raise, taking in GBP700,000 gross through the issue of 233.3 million ordinary shares at the same price 0.3p per share.
Shares in Echo Energy were down 15% at 0.36p in London on Tuesday, giving the company a market capitalisation of GBP2.9 million.
Chief Executive Martin Hull said: "2020 has presented many challenges, both for Echo Energy and the industry at large. We have taken the opportunity to restructure our balance sheet to provide the platform and breathing space to access the very real opportunities our portfolio holds to deliver meaningful value to our investors.
"We are focused on delivering production, cashflow and value growth for all stakeholders and this debt restructuring alongside the introduction of new capital marks a critical milestone on our journey," he added.
By Zoe Wickens; [email protected]
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