LONDON (Alliance News) - LGO Energy PLC Friday said a number of its creditors have agreed to be issued shares in the company in settlement of liabilities.
LGO said a number of its wholly-owned subsidiary's creditors have agreed to be paid by the company in shares. The company did not provide details or reveal how many or which creditors it had struck a deal with.
LGO did state that the total value of the invoices being settled is around GBP900,000, which is part of a net creditor balance totalling GBP1.6 million.
"To conserve cash resources to deploy in production related activities the company has agreed to make various payments on behalf of its subsidiary in Trinidad for services received in the 2015 drilling campaign at Goudron. We appreciate the flexibility shown by these creditors and look forward to working with them in the future," said Chief Executive Neil Ritson.
The company signed an agreement last month with BNP Paribas over the funds that LGO has drawn down under a pre-paid swap arrangment.
LGO and BNP agreed to terminate the agreement at its current value of USD10.8 million, including all future interest and fees. LGO's subsidiary Goudron E&P Ltd has now entered into a schedule of repayments of a reduced rate of USD75,000 a month for the next three months. After this, the remaining outstanding balance will be recovered over the following 19 months at a rate of around 5% per month.
The final repayment is due no later than September 2017. LGO said it is has also reached a deal after working closely with its advisors in the US, Wellford Capital Markets LLC and Height Securities LLC. Both advisors have agreed to be issued with LGO shares worth GBP50,000 to satisfy their initial retainer, LGO said Friday.
"The company continues to work closely with its US advisors, Wellford and Height, on strategic investments into the business to fund the future development program at the Goudron Field in Trinidad," Ritson added.
"All shares will be priced on the basis of the mid-market closing price on the day prior to their issue and further announcements will be made when the shares are allotted and application made for them to trade on the Alternative Investment Market," said LGO.
LGO shares were trading up 1.2% to 0.430 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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