13th Aug 2015 07:12
LONDON (Alliance News) - Independent Oil and Gas PLC Thursday said it has been given extra time to try to scramble together a financing package to allow the company to complete its acquisition of a stake and to fund the work programme for the Skipper license offshore the Shetland Islands in the UK.
Despite securing an extension to close the deal after its funding agreement collapsed last week, Independent Oil only has 22 days to secure financing before it has to repay a loan.
Independent has agreed to acquire a 50% stake in the Skipper license which was backed by shareholders at the end of July, however the deal was placed at a risk last week after a funding package set to inject USD10 million of equity funding into the company alongside a large debt facility collapsed.
After that deal collapsed, it was unclear if Independent were to be able to raise the funds in order to complete the deal and participate in the work programme as it reported a very low cash balance.
On Thursday, Independent Oil said it has secured an extension until September 7 to secure financing in order to complete the acquisition, which Chief Executive Mark Routh said would "optimise our chances of securing the funding required to drill the commitment well on Skipper".
However, the deadline for Independent to secure funds is actually closer. Although it has until September 7 to secure the deal, the company is only funded until September 4, when it must repay its GBP358,000 loan from Darwin Strategic.
The funding deal originally in place with "an internationally listed group with a multi-billion dollar market capitalisation" comprised of USD10 million worth of equity funding and an "attractively priced" related debt facility worth USD480 million.
However that deal collapsed last week after the unnamed company pulled out "due to the renewed fall in commodity prices" which Independent called unexpected and disappointing. However, the company said it had alternative options available which it was investigating.
Independent Oil shares were up 8.8% to 6.80 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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