31 Jul 2015 10:39
Corporate update
London, 31 July 2015
Afren Plc (the 'Company') provides an update on the outcome of the discussions regarding its financial situation.
As announced on 15 July 2015, the recently completed operational review has led the Company to expect materially lower near-term production from its assets as compared to the production level assumed in the restructuring plan announced on 19 June 2015. This change is due to a number of timing and pricing assumptions, as well as to some delays in project implementation during the period when initial funding was being finalised. Whilst the overall capacity of the assets to deliver field life production remains broadly unchanged, the near-term deferral of production revenues has undermined the immediate liquidity position of the business. The Company has subsequently engaged in detailed discussions with all its stakeholders, including lending banks, bondholders and partners, to discuss the impact of the revised assumptions on Afren Plc's near-term cashflow, funding requirements and the resulting amendments in the terms of the restructuring which are required to deliver the revised business plan.
The board believes that all the possible routes have now been explored during the course of this process, which was subject to a strict timetable, driven by Afren Plc's short-term liquidity issues. These discussions have failed to deliver support for a revised refinancing and restructuring proposal that would result in Afren Plc being able to pay its debts as they fall due. As a result, the Board has taken steps to put Afren Plc into administration and appoint Simon Appell, Daniel Imison and Catherine Williamson of AlixPartners as administrators. The relevant documentation will be filed at Court during the course of the day.
The appointment is made with the consent of the Company's secured creditors and is seen by those secured creditors as an important step in preserving value in the Company's subsidiaries. No other company in the Afren Group has appointed administrators today or taken any other step to commence insolvency proceedings. The Group is in discussions with its partners and other key stakeholders with a view to continuing its operating businesses.
ENDS
For further information contact:
Afren plc Tel: +44 20 7864 3700
Natalia Erikssen, Investor Relations
AlixPartners
Press Office Tel: +44 20 7332 5225
apspressoffice@alixpartners.com
Notes to Editors
About Afren
Afren is an independent upstream oil and gas exploration and production company listed on the main market of the London Stock Exchange. Afren has a portfolio of assets spanning the full cycle E&P value chain. Afren is currently producing from its assets in Nigeria and holds further exploration interests in Nigeria, Ghana, Côte d'Ivoire, the Kurdistan region of Iraq, Congo Brazzaville, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania and South Africa. For more information please refer to www.afren.com.
About AlixPartners
AlixPartners is a leading global business-advisory firm of results-oriented professionals who specialize in creating value and restoring performance at every stage of the business life cycle. We thrive on our ability to make a difference in high-impact situations and to deliver sustainable, bottom-line results. The firm's expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks and investors to respond to crucial business issues. For more information, visit www.alixpartners.com.