20th Jul 2016 06:53
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd on Wednesday said it will hold a special general meeting next month when votes will be cast on a company proposal to restructure its balance sheet that will severely water down the stakes held by existing shareholders.
Gulf Keystone signed an agreement with the majority of its bond and loan note holders to address its hefty debt pile last week as it stressed restructuring the balance sheet was "the only prospect for the company to continue trading and avoid a liquidation".
The deal will convert USD500.0 million of existing debt supplied by the bond and loan note holders into equity, and an open offer will also be conducted to raise funds so the company can invest in its producing assets that are facing declines.
Excluding the open offer, the huge debt reduction will lead to Gulf Keystone's existing shareholders only owning 5.0% of the company, but the open offer will make shares available to those shareholders that will be equal to a 10% stake in Gulf Keystone post-capital restructuring.
If the open offer is fully subscribed, then existing shareholders will own 14.5% of the company whilst the conversion of debt into equity will mean loan note holders will have a 65.5% stake whilst bond holders will own the other 20%.
The meeting will be held in Switzerland on August 5, and Gulf Keystone Wednesday outlined the exact resolution that shareholders will be voting on:
"That the authorised share capital of the company be increased by USD219,105,237 from USD73,000,000 by the creation of 21,910,523,665 new common shares, ranking pari passu in all respects as one class of shares with the existing common shares," said Gulf Keystone.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Gulf Keystone Petroleum