1st Jun 2016 10:56
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd Wednesday said it has been given 12 more days to address its financial woes after the majority of the holders of its bonds and loan notes agreed to extend the existing standstill agreement until later this month.
Gulf Keystone reached an agreement in late April with the Ad Hoc Committee, which is comprised of a portion of the holders of the company's loan notes and bonds, to delay coupon payments whilst the company tries to address the urgent need to raise funds.
Gulf Keystone delayed over USD26.0 million of coupon payments that had been due on April 18 using a grace period before signing a formal extension with the committee that gave it until the end of May to make the payment.
However, Gulf Keystone Wednesday said discussions with the committee remain ongoing and therefore the standstill agreement has been extended until June 13.
Importantly, the original standstill agreement was signed with a "significant proportion" of note and bond holders that represented "less than 75% of the principal amount."
However, on Wednesday Gulf Keystone said the amount of signatories of the new standstill agreement are "substantially the same" as the prior agreement, suggesting a small portion of the bond and loan note holders may have declined to give the company any more time.
Gulf Keystone said the signatories of the latest agreement still hold a significant proportion of the total amount but still "less than 75% by principal amount".
That means the holders that have not signed the standstill agreement, which hold over 25% of the overall principal amount owed under the bonds and notes in question, could demand Gulf Keystone immediately pay the outstanding amount.
However, the holders that have signed that standstill agreement have agreed "not to vote in favour" of such a proposal.
Gulf Keystone shares were down 2.7% to 4.41 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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