4th Jun 2014 11:12
LONDON (Alliance News) - Sefton Resources Inc Wednesday said it is still in discussion with its bank and new funder Hawker Energy LLC, a subsidiary of Sara Creek Gold Corp, regarding the group's existing borrowing facilities, but has entered into an inter-creditor agreement to extend the time it has to repay the bank in full.
In a statement last month, Sefton Resources said it had entered into a letter of intent with a private US-based energy company, without naming the company, which it said will provide it with interim working capital, but will also see the funder acquire a 80% stake in its operating subsidiary in California, TEG USA.
The oil and gas producer with interests in California and Kansas said Wednesday in a statement, that it is still in discussions with the Bank of the West and the funder, named as Hawker Energy, a wholly owned subsidiary of Sara Creek Gold.
The group said that the inter-creditor agreement allows Hawker Energy to advance additional subordinated loans to Sefton Resources in two instalments, which will fund up to two 30 day extensions of the existing borrowing facilities with the Bank of the West. It said that brings the aggregate amount of subordinated debt balance up to USD1 million.
It said the extension payments advanced to the group by Hawker Energy will be paid to the bank in settlement first of accrued interest, and then to reduce the principal amount of the existing borrowing facilities.
Sefton Resources said the interim financing will provide additional time for the Hawker Energy to conclude its own financing arrangements in relation to the investment in TEG USA.
Sefton shares were down 6.3% to 0.150 pence at midday Wednesday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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