30th Sep 2016 06:51
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd on Friday said the court hearing regarding its proposed financial restructuring with its note and bond holders has resulted in the scheme of arrangement being sanctioned.
Gulf Keystone did not reveal any other information but said the sanctioning means it can progress the restructuring as planned.
The company looks set to return from the brink of collapse next month, when it will look to relaunch the company once the finance situation has been sorted - but stakes held by existing shareholders will be watered down significantly as a result.
The oil producer operating the Shaikan field in the Kurdistan region of Iraq is currently restructuring its debt and that is expected to be completed in mid-October, lowering debt by some USD600.0 million by converting it into large amounts of equity. Debt would stand at about USD100.0 million post-restructuring.
However, existing shareholders will be watered down to a mere 5.0% once the debt has been converted, but they do have the ability to participate in an associated, USD25.0 million open offer that would, if all shareholders took up their entitlement, raise that stake to 14.5%.
Note holders would own around 65.5% whilst the bond holders would have the other 20%.
By Joshua Warner; [email protected]; @JoshAlliance
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