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KrisEnergy details restructuring proposals

Published: 08:59 17 Nov 2016 EST

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Talks have taken place with debt holders

KrisEnergy Ltd (SGX:SK3) has given details of a new restructuring plan which is expected to see the company rearrange existing debts and secure an injection of new capital.

It follows an earlier proposal and subsequent talks with the lenders.

“This restructuring is essential for the survival of KrisEnergy and without which there is no guarantee that the company can continue to operate and meet its various obligations,” interim chief executive Jeffrey MacDonald said.

“The consent solicitation is a critical element of the restructuring and is aimed at providing the company with a stable and sustainable capital structure and an enhanced liquidity position.”

The plan is to have its debt holders exchange its existing loan notes, which are due in 2017 and 2018, for new notes expiring in 2022 and 2023.

They will be exchanged at full face value, under a new coupon structure.

MacDonald told investors that the company consulted noteholders to understand their views and concerns. “Their feedback has been considered very carefully at all levels, including all stakeholders,” he added.

“These consultations have resulted in a revision of the proposed cash interest rate from the fifth coupon payment onwards when it is believed that the company should be in a better position as new production comes on stream and oil prices are forecast to be at a slightly higher level than today.

“Noteholders will benefit in any upside of the business with a coupon step-up corresponding to increases in Brent Crude Oil prices.”

MacDonald added: “If the consent solicitation is approved, it will be followed by a substantial injection of new capital, which will be used to execute the new business plan, that if successfully implemented, will generate additional cash flow to repay noteholders.”

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