19th Sep 2007 07:00
Cardinal Resources plc18 September 2007 Stock Exchange AnnouncementFor immediate releaseLondon - 18 September 2007 Takeover talks terminated. Refinancing discussions continue. Cardinal Resources plc (AIM: CDL) ("Cardinal" or the "Company"), an independentoil and gas exploration and production company operating in Ukraine, todayannounces that the discussions with multiple parties announced on 3 September2007, which could have led to an offer being made for the Company, are not nowexpected to lead to any such offer being forthcoming. Takeover talks havetherefore terminated. The origin of more than one of these discussions was the need, described at thetime of Cardinal's 2006 results announcement on 30 June 2007, to concludenegotiations for a medium term financing package and raise equity finance eitherby way of institutional private placement or underwritten rights issue.Discussions with one or more potential equity providers continue. On 30 June 2007, Cardinal announced that it was in discussions with Silver PointCapital to restructure the bridge PIK notes first issued on 23 December 2005 andthat it had obtained a Commitment Letter from Hares Group Holdings GmbH ("Hares"), to fund the Company's working capital requirements in case of any shortfallover the period ending 1 July 2008. The detailed terms of the Silver PointCapital PIK note facility require prior consent of Silver Point Capital (as isnormal for a senior lender) before Cardinal is able to draw down on anysubordinated loan such as that provided for by the Hares Commitment Letter. Aspart of the current negotiations, Silver Point Capital have not provided consentto such a drawdown. Instead of drawing down under the Hares Commitment, Cardinalis therefore seeking to re-designate and access a portion of the undrawn US$14.1million RC re-instatement facility for general working capital purposes.Following the last covenant review, Silver Point Capital have neither waivedcovenant breaches nor issued any notice of default. In the meantime, Cardinal'scash-flow remains very tight. Conclusion of negotiations and improvements in cash flows have been hampered bya delay in start up of production and sales from the new gas gathering andseparation facility which the Directors had hoped would commence some weeks ago.Start up has been delayed principally by the need, following Ukrainegovernment inspection of the completed facility, to add further health andsafety features. This additional work has now been completed and permission tocommence production and sales is expected shortly. Contacts:Cardinal Resources plcCharles Green / Natalia Egorova+44 20 7936 [email protected] Nominated Adviser - Nabarro Wells & Co. LimitedJohn Wilkes / Marc Cramsie+44 20 7710 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Cloudbreak