LONDON (Alliance News) - Xcite Energy Ltd Tuesday said it is concluding negotiations with its principal bondholders to finalise the restructuring of its secured bonds, but expects that the restructuring will comprise 100% of the value of the outstanding bonds being exchanged for 98.5% of the enlarged share capital of the company.
It is also in talks to secure a working capital facility of up to USD10 million.
Whilst this will provide the company with a significantly stronger balance sheet, Xcite said, it recognises that this represents a "very significant dilution" to its existing shareholders.
Xcite's directors said they believe this is "in the best interests" of the company, and will call an extraordinary general meeting to vote on the proposed restructuring.
It said that, should shareholders not support this restructuring, the bondholders intend to pursue enforcement action, which is "unlikely to result in the return of any value to the company's existing shareholders."
In order to facilitate the discussions and the meeting, it has requested a further short-term extension of the maturity date of the bonds to the end of October or the immediate demand by the bond trustee; whichever is earlier.
Shares in Xcite were down 23% at 1.65 pence Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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