A North Sea-focused energy company saw its shares skyrocket yesterday after revealing its debt to a specialist lender had been wiped out.
AIM-listed Independent Oil and Gas (IOG) owed Darwin Strategic £245,780, but the lender has agreed to convert the outstanding debt into 6.5million shares at a price of 3.7p each.
The new shares are expected to be admitted to trading on the AIM market on Monday.
Darwin has restructured its loan on several occasions, which has helped keep IOG afloat. It recently sold more than 2million IOG shares to reduce the debt by about £80,000.
The deal provided the energy firm with additional capital of £16,000.
But IOG is still scrambling to unearth new sources of cash. IOG said yesterday it only has enough funding to keep it going until late November.
Despite the warning, IOG’s share price ended the day on 7.5p, up 62%.
IOG chief executive Mark Routh, said: “It is important for IOG and all its stakeholders that the outstanding liability to Darwin has been extinguished.
“We are grateful that Darwin has allowed their loan to be restructured and extended several times without levying additional interest and fees.
“We look forward to providing a further operational and financial update in due course.”
Darwin, part owned by Henderson Investors and Investec, specialises in offering unusual “self-directed equity issuance structures” for companies listed on the junior market.
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