Malcy comment25 May 2021 17:28
If the proposed restructuring is approved and implemented, we will focus our efforts on maximising Lancaster cash flows to pay down debt, as well as making the case for further development of our West of Shetland asset base”
It is interesting that the CEO says that the company is unable to support its debt and therefore a restructuring is needed that would wipe out the equity shareholders in order to pacify the bondholders. It makes it sound like this is the only option and in my view that may not be the case. Production of say, 14,000 b/d at $70 and a fairer restructuring between debt and equity might just be doable but it’s not on the cards.
I am aware of the moves by Crystal Amber as major equity holders which seems to me to be pretty sensible under the circumstances, other shareholders would probably be wise to see what they are doing. Indeed I dont know where Kerogen stand on this, if they still have a substantial holding it must be in their interests to join with CA, and unless they have been buying the debt to offset their risk they should fight. So, I suspect that the retail holding being pretty substantial may be enough to vote the board down if it went that far….the alternative is not worth thinking about…