LONDON (Alliance News) - IGas Energy PLC on Thursday said it is continuing to hold talks with bondholders and potential strategic investors as it works towards agreeing a restructuring of its financing obligations.
In October, IGas summoned its bondholders to request that the company's daily liquidity covenant be removed and to begin formal discussions to agree on a more sustainable, longer-term solution to its financing issues. Last month, the group said it remained in talks with its bondholders.
On Thursday, the group said it currently is in "well progressed" discussions with one potential strategic investor, though said there can be "no certainty" a deal will be reached or a transaction will be forthcoming.
IGas said it continues to hold "significant cash resources" of USD32.0 million as at December 22 and said it expects to remain compliant with its daily liquidity covenant until late March 2017 based on current forecasts.
However, the group confirmed its current forecasts project non-compliance with its leverage covenants as at December 31.
IGas said its position remains that in the event of a breach of the leverage covenants, an equity cure provision exists within the bond agreements, such that a breach can be cured within 25 business days of the delivery of the compliance certificate for that period.
For the 12 month period ending December 31, the compliance certificate must be delivered by April 30, 2017 and, as such, the latest date for any equity cure would be June.
The group said, though, that completion of a potential transaction would remedy any leverage covenant breaches as at December 31 and remedy the forecast breach of the daily liquidity covenants.
Shares in IGas were down 5.3% at 11.01 pence on Thursday following the announcement.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
