Oil producer Afren Plc said its board has decided to put the company into administration after failing to secure support for a refinancing and restructuring plan.
For lay folks, this means the administrator will decide whether they can help the company to become a going concern, or more often if they can get a better price for assets than immediate liquidation would give.
Afren, whose shares have been suspended since July 15, said talks with bondholders, banks and its partners were scuppered after the company cut its production forecast for the year.
“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 said in a statement.
The board has appointed Simon Appell, Daniel Imison and Catherine Williamson of AlixPartners as administrators and said it is working with its partners to continue operations.
Afren, whose main producing assets are in Nigeria, was forced to take a nearly $2 billion charge in 2014 for impairments and write-offs due to the fall in oil prices and the wiping out of reserves at an oilfield in Iraqi Kurdistan.