Ok here is the position as I see it. I have followed this for sometime but not previously posted. I am a shareholder in XEL. This will be familiar to many of you:
1) XEL is a BVI incorporated company that wholly owns Xcite Energy Resources plc (XER) a UK incorporated company. All relevant filings for XER can be found at UK companies house. XER has issued $135M of senior secured bonds. The bonds are secured by the assets of both XER and XEL. The bonds are listed on the Oslo stock exchange and relevant filings can be found on the Oslo stock exchange news web.
2) The bonds are due for repayment and negotiations as to an extension in the repayment date have failed. Neither XEL nor XER have been able to refinance the bonds. The bond holders are therefore pursuing their legal rights to enforce their security following what will constitute an event of default. It appears that they are seeking to keep XER as a going concern and therefore seeking enforcement against XEL and not XER. They are likely to have that right.
3) Bond holders have requested the bond trustee to pursue XEL into an insolvency liquidation by petitioning the Courts in the BVI for the appointment of a liquidator. From the latest RNS it appears that a provisional liquidator has been identified.
Options available to shareholders:
The bond holders position is likely to be strong and it seems hard to see that a liquidation will not follow. Shareholders should ensure that the proposed liquidator is appropriately arm's length. This is important for a number of reasons: a) to ensure that an appropriately robust negotiation takes place between the liquidator and bond holders in seeing if any assets or rights can be preserved for shareholders; and b) to ensure that they consider appropriately whether any rights of claim lie against the directors for their prior conduct and, if they do, that such rights are pursued. If shareholders do not believe the liquidator is appropriately arm's length this should be raised with the BVI court and an alternative unrelated and willing liquidator should be identified.
The only other option seems to be to pursue a claim against the directors. Most directors of listed companies now maintain directors' and officers' insurance to cover such circumstances. This means that if a claim is successful there is an insurance policy to make a payout. It may well be that either no policy exists or if it does, the cover is not hat large.
Shareholders are only ever really successful in these circumstances when they coalesce behind a shareholder action group that has some funding.
Yep, via the bondholders sadly, not this useless management who have not succeeded in same for years. If there had been something there the bod wd have had to have both notified and taken it up, rather than descend to the current self inflicted shambles over which they continue to preside.
Point 2 wd be nice but petitioning oga for suspension too much left field to succeed, as inept bureaucrats these guys will work to the limits of their remit which is sfa anyway.
Better as national treasure we are told via expense and delay put to by decc by whichever clo•n there at the time was persuaded to revise xer's draft fsp/ssp to expensive ewt, not to say the morons in xer at the time were not complict by non existent operations and licensing pre planning of said fdp submission.
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