19th Feb 2015 14:22
LONDON (Alliance News) - Max Petroleum PLC Thursday said it has noted that the company's share price has risen since it said it was negotiating with Sberbank to save the company from being "unviable".
"The board notes the recent price movement in the company's ordinary shares and confirms that there are currently no updates to the company's announcement of February 9, 2015," said Max.
Last week, the company said it is negotiating with Sberbank regarding restructuring its USD82.8 million loan owed to the bank.
"Max Petroleum's business has been rendered unviable unless further material investment is made into the company in addition to there being a comprehensive debt restructuring agreed with Sberbank," Max said on Monday last week.
The company said negotiations with Sberbank are continuing and that it is also talking to AGR Energy regarding an equity investment.
In August, Max Petroleum struck a deal with AGR Energy, under which AGR would obtain a 51% stake in the company in exchange for a GBP37.1 million cash subscription.
Last week, the company said the deal with AGR won't proceed, but said talks will continue about an equity investment that, together with the debt restructuring, will render the company viable at current oil prices.
"The directors of Max Petroleum currently believe that there is a reasonable prospect that ongoing discussions could result in a sufficient refinancing of the company and, on that basis, have not put the company into administration," Max said Thursday.
"However, in light of upcoming creditor payments, including a material amount that becomes due on February 25, 2015 to the Kazakh tax authorities and payable by early March 2015, there is only a short period remaining to achieve such a refinancing and if current efforts are unsuccessful then the consequences will be negative for all stakeholders in the company," it added.
On Thursday before the announcement, Max shares reached a high of 0.25 pence per share, dropping back to 0.168p by mid-afternoon, still up 29% on the day.
By Joshua Warner; [email protected]; @JoshAlliance
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