3rd Aug 2015 07:49
LONDON (Alliance News) - Petroceltic International PLC on Monday said that it has suspended formal marketing of its bond issue, which has been at the centre of an ongoing dispute with a major shareholder, due to volatile market conditions.
The planned USD175 million bond issue has been criticised by Worldview Capital Management Ltd, which holds a 29% stake in Petroceltic. Worldview has been waging a long-running war against Petroceltic's management team, including attempting to oust its current chief executive, and has recently focused its ire on the bond issue.
Worldview had claimed Petroceltic had "run out of money" and therefore was placing its key Ain Tsila gas condensate field in Algeria as security for the proposed bond issue, which Worldview described as "perilous to shareholders".
On Monday, Petroceltic said that its attempt to launch the bond issue has coincided with volatile market conditions, which have made it challenging to secure the financing on the terms it wants. As a result, Petroceltic said it has suspended formal marketing of the bond issue until completion of the transfer of its interest in the Isarene production sharing contract in Algeria.
On July 24, Petroceltic said it has transferred its interest in the Isarene contract to its Petroceltic Ain Tsila Ltd subsidiary. The contract covering the Ain Tsila gas condensate field is the company's key asset, and Petroceltic is aiming to produce 2.1 trillion cubic feet of sales gas and 179 million barrels of liquids, comprising 69 million barrels of condensate and 110 million barrels of liquid petroleum gas over the 30 year PSC period.
Until the contract transfer is completed, Petroceltic said it will continue talks with potential investors on an informal basis.
"The transfer of our interest in the Isarene PSC to a wholly owned subsidiary is a positive event. The company continues to pursue its previously announced financing strategy which it believes is in the best interests of the company and its shareholders as a whole," said Brian O'Cathain, Petroceltic's chief executive.
Shares in Petroceltic were down 8.8% to 60.00 pence early Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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