LONDON (Alliance News) - Faroe Petroleum PLC Thursday noted that fellow AIM-listed Kea Petroleum PLC, of which its Chairman John Bentley is a director, has entered into voluntary liquidation.
Bentley is a non-executive director of Kea Petroleum, which announced it would be entering voluntary liquidation back in late November after failing to convert the struggling company into an investment company.
Faroe Thursday noted Kea had entered into liquidation, as it is required to do under AIM rules due to the link between its Chairman Bentley and Kea Petroleum.
Kea Petroleum entered liquidation after failing to raise the essential funds needed to keep the company going and to control its "critical" financial position as it struggled to sell its assets which were being snagged by various problems.
Its cash resources were almost "totally depleted" back in June but it limped on and tried to complete the sale of its assets, forcing the company to rely on its directors and creditors which were not being paid. Kea also slashed its workforce by two-thirds to only six members of staff, four of which were board members, as it made cuts anywhere possible.
The sale of its Puka asset in New Zealand was being delayed as the company had to wait for approval from authorities whilst it lost control of its other asset in the country after Kea liquidated two subsidiaries that were involved in a litigation, forcing an organised sale to collapse.
Faroe shares were down 4.7% to 50.25 pence per share on Thursday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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