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Afren Exits London Stock Exchange As Shares Are Delisted

Mon, 10th Aug 2015 12:36

LONDON (Alliance News) - It was a drab Monday morning for shareholders of Afren PLC after the company's shares were officially delisted from the London Stock Exchange, marking the final fall of the former FTSE 250 constituent.

Following the Nigerian oil producer's shares being suspended in July due to uncertainty over its finances, which led to the administrators being called in soon after, Afren's shares were officially delisted by the Financial Conduct Authority on Monday morning.

AlixPartners was appointed as the company's administrator at the end of July, about two weeks after its shares were suspended after a fall in production threatened its already controversial and much-debated restructuring plans aimed at saving the company.

Afren previously had said it expected to produce between 29,000 to 36,000 barrels of oil per day in 2015, but admitted that it had "become clear" the company wouldn't achieve the target, meaning it could not accurately inform the market about its financial position.

That also placed the restructuring plans with bondholders at risk, forcing Afren to ask for even more money on top of the substantial amount already needed to be injected and its mountain of debt.

The embattled company said it had exhausted all possible routes to save the company in a short space of time due to the company's dire liquidity issues, but said it failed to secure a revised refinancing and restructuring proposal that would result in Afren being able to pay its debts as they fall due.

The rather sudden collapse of Afren with administrators being appointed was a stark turnaround from the company's position in June, when it said there had been "no significant change in the financial or trading position of the group since March 31, 2015".

One group that will likely continue to fight Afren for answers is the Afren Legal Action Group, which in July wrote to the City regulator demanding an investigation into whether the troubled oil producer was involved in "the withholding of material information", asking the the UK Financial Conduct Authority to investigate whether Afren operated in "potential collusion with certain bondholders".

The trust between Afren and its shareholders had been fragile and shattered since October 2013 when former Chief Executive Osman Shahenshah and Chief Operating Officer Shahid Ullah were sacked for accepting unauthorised payments.

That was followed by failed refinancing deals, the collapse in the oil price and dwindled cashflow which wiped away Afren's equity value, as its share price fell by more than 98%, falling from 148.8 pence in July 2014 to 1.785p when its shares were suspended.

By Joshua Warner;; @JoshAlliance

Copyright 2015 Alliance News Limited. All Rights Reserved.

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