RE: The telegraph article11 May 2020 10:33
As I said, it is my understanding. I do not know much about debts and deals like this but this RBL I would expect PMO will like to have debt based on Reserves.
[17] While a common method of refinancing for a company in the Group’s sector wouldbe reserve based lending (“RBL”) facility (a form of lending against existing and anticipatedyields of oil- and gas-producing assets), coupled with a subordinated public debtsinstrument, the Group would currently be able to obtain an RBL facility for only part of itsdebt. (This basis for this view is a report from PWC (“the PWC Report”).) ARCM challengethe assumptions in the PWC Report and also criticise the lack of a further or independentreport to support this view. Furthermore, it is the view of the directors that the Group isunlikely to be able to obtain sufficient subordinated debt to repay the balance of the SchemeDebt Facilities. The directors do not believe that a partial refinancing is feasible.
18] The Schemes seek to enable a complex transaction (“the Proposed Transaction”) to becarried out for the purposes inter alia of extending the maturity date of the Group’s debt(“the Credit Facilities Extension”) from 31 May 2021 (ie, the Scheme Maturity Date) to30 November 2023, and to improve the ability of the petitioners to fund ongoing activities.Page 9 ?9The Schemes are not seen as achieving the resolution of the Group’s financial challenges (inthe sense of deleveraging the balance sheet), but are intended to improve the Group’sfinancial position and to enhance the ability of the Group to execute a future refinancing ofthe Scheme Debt Facilities. In part, this is sought to be achieved by adding to the Group’sdebt capacity under RBL. The Schemes are also intended to avoid hitting the debt wall; thatis, to avoid what the directors of the Group regard as a very substantial risk that the Groupwill not otherwise be able to refinance the Scheme Debt Facilities before the Scheme
[88] Furthermore, in respect of complex schemes, such as the Schemes, it is inapt to focuson the individual elements of an arrangement (in disregard of their function within thewhole) where the constituent elements are expressly interconnected. The different elementsof the Schemes are strongly interdependent: the Acquisitions are predicated on a successfulequity raise; the improved RBL is dependent on the Acquisitions
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