Swedish oil explorer PA Resources (PAR) has thrown itself on the mercy of it debtors after warning it will default on loan payments worth £13.4million due to political problems in Tunisia.
The value of the firm dropped by more than 40% yesterday after the company called on holders of bonds worth £130million to allow it delay interest payments due in late September and early October until next year.
In an announcement PAR said it has struck an agreement to delay payment of £610,000 its largest its largest creditor and shareholder, the Gunvor Group, until the end of March 2015.
The Swedish oil broker is majority owned by Torbjörn Törnqvist, and his firm underwrote PAR’s £72million refinancing last year. Gunvor has a 9.9.% stake in the Nasdaq OMX Stockholm-listed oil and gas company and owns £113million of its debt.
Holders of the company’s Swedish and Norwegian denominated bonds have been asked to wait until April 5 of next year to receive payments with interest.
Despite the recent fund raising, the company said it would need “a significant amount of new equity” in order to fund its planned operations through 2015 as it warned it would need to set out a financing plan.
But it added that it would not be able to raise fresh funds until it gets “further clarity” on its operations in Tunisia.
The company also admitted it has been hit by delays in the £95million sale of a majority stake in its in Didon and Zarat fields offshore Tunisia to Enquest due to “ongoing government approval processes”.
In its statement the company said it has “struggled to overcome challenges inherited from several legacy issues”.
These include a “failed investment” in the Azurite field offshore Republic of Congo (Brazzaville) after lower than expected recovery rates.
PAR’s chief executive Mark McAllister, former boss of Acorn Oil & Gas and Fairfield Energy, was brought in to lead the firm after the departure of Bo Askvik last year.
He said: “Management and the board of directors are of the opinion that the proposed amendment of the terms of the bond issues combined with the roll up of interest on the secured credit facilities and other cash preserving actions will give us the necessary time to prepare and execute a long-term financing plan in the best interest of all stakeholders following clarification of the situation in Tunis
The value of the firm dropped by more than 40% yesterday after the company called on holders of bonds worth £130million to allow it delay interest payments due in late September and early October until next year.
In an announcement PAR said it has struck an agreement to delay payment of £610,000 its largest its largest creditor and shareholder, the Gunvor Group, until the end of March 2015.
The Swedish oil broker is majority owned by Torbjörn Törnqvist, and his firm underwrote PAR’s £72million refinancing last year. Gunvor has a 9.9.% stake in the Nasdaq OMX Stockholm-listed oil and gas company and owns £113million of its debt.
Holders of the company’s Swedish and Norwegian denominated bonds have been asked to wait until April 5 of next year to receive payments with interest.
Despite the recent fund raising, the company said it would need “a significant amount of new equity” in order to fund its planned operations through 2015 as it warned it would need to set out a financing plan.
But it added that it would not be able to raise fresh funds until it gets “further clarity” on its operations in Tunisia.
The company also admitted it has been hit by delays in the £95million sale of a majority stake in its in Didon and Zarat fields offshore Tunisia to Enquest due to “ongoing government approval processes”.
In its statement the company said it has “struggled to overcome challenges inherited from several legacy issues”.
These include a “failed investment” in the Azurite field offshore Republic of Congo (Brazzaville) after lower than expected recovery rates.
PAR’s chief executive Mark McAllister, former boss of Acorn Oil & Gas and Fairfield Energy, was brought in to lead the firm after the departure of Bo Askvik last year.
He said: “Management and the board of directors are of the opinion that the proposed amendment of the terms of the bond issues combined with the roll up of interest on the secured credit facilities and other cash preserving actions will give us the necessary time to prepare and execute a long-term financing plan in the best interest of all stakeholders following clarification of the situation in Tunisia.”
