9th Feb 2015 07:48
LONDON (Alliance News) - Max Petroleum PLC Monday said the company is "unviable" unless it can secure further investment and successfully restructure its debt due to the fall in the oil price.
"The fall in the oil price since November 2014 has had a very severe adverse impact on the company's current and forecast liquidity position in 2015 and beyond. As a result, 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," said the company.
The company said it is negotiating with Sberbank regarding restructuring its USD82.8 million loan owed to the bank.
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.
On Monday, the company said the current deal with AGR will not proceed, but talks will continue about an equity investment that, together with the debt restructuring, will render the company viable at current oil prices, it said in a statement.
"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," said Max Petroleum.
"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," it said.
By Joshua Warner; [email protected]; @JoshAlliance
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