Circle Oil today confirmed it had been forced to suspend its shares on the London Stock Exchange as it grapples with financial uncertainty.
The move comes after the company launched a strategic review of its affairs in March.
A company spokesperson said: “The process has now reached a stage where, taking into account the company’s outstanding debt position, including the amount outstanding in respect of the convertible loan, and based on the current status of the proposals received to date, the directors believe it is likely there will be no value attributed to Circle equity holders. For the avoidance of doubt this is irrespective of the position set out in the equity and liabilities capital and reserves section of the consolidated statement of financial position at 31 December 2015.”
The operator said its financial were suffering from “unpredictable and infrequent payments” from the Egyptian General Petroleum Corporation (EGPC).
Revenue for 2015 was $38.95million – down from the previous year’s $84.62million.
The group’s operating loss, before write-offs and impairments, was $108.82million.
Chairman Stephen Jenkins said:” Analysis of the cash flow forecast has identified the need, to renegotiate existing funding arrangements or obtain additional funding in July 2016 in order for the group to meet its on-going cash requirements.
“The group has a significant short-term obligation of $57.5million payable in full in the event of default under the terms of the RBL facility signed with IFC and may be required to repay the Convertible Loan liability of $20 million.
“In addition, the ongoing volatility and unpredictability of receipts from EGPC, which has continued to worsen, further exacerbates the challenging liquidity situation. In light of the above factors, management’s forecasts indicate that it will not be able to pay the ongoing debt interest payments and operational cash requirements from August 2016 without additional funding.”
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