- Afren has announced capital restructuring plans in the wake of its mounting liquidity crisis
- The Company had a cash balance of approximately US$235 million at 31 December 2014.
- Liquidity available to the Company is significantly lower as a result of restricted and segregated cash balances in place to address operational requirements.
- The Company’s near term cash flow is also impacted by capital expenditure incurred in late 2014 before operational changes had been implemented to adapt to the current lower oil price environment.
- The company was due to repay $50million due on its loans but has officially asked for a deferral
- The $50m was due to lenders of the US$300m Ebok debt facility
- In addition, the company is considering whether to utilise a 30 day grace period under its 2016 bonds with respect to US$15m of interest due on 1 February 2015 while the review of the capital structure and funding alternatives is completed.
- These actions it said, are being taken to protect the immediate liquidity position of the Company while it seeks funding to address its additional requirements.
- Shares in the company, which produces most of its oil in Nigeria, fell as much as 71 percent to a record low of 5 pence, wiping 141 million pounds ($213 million) off its market value.
- Afren Market value is now Under £300m and way below its total funding requirements.
- On top of the slide in oil prices, Afren has struggled with internal issues including the dismissal of top executives and the suspension of operations in Iraqi Kurdistan.
- Press release
