North Sea oil producer EnQuest saw its shares slump more than 6% after it revealed plans to raise an additional £5.4million in loan notes instead of paying its lenders interest in cash next month.
The company told noteholders it would not pay interest due on 15 February and would instead raise the funds, increasing the loan book from £155million to £160.4million.
The 7% bond, launched in January 2013, was one of the first to be issued by an oil and gas company to retail investors through the electronic order book (orb) hosted on the London Stock Exchange. Full repayment of the so-called “payment-in-kind” (pik) loan is scheduled for 2022.
EnQuest announced the accrued interest payable would be satisfied through the issue of the additional notes and consolidated with the existing notes in issue.
The company said admission of the additional notes is expected to take place “on or shortly after” publication of the company’s full year results for 2016 which is planned in March.
EnQuest shares closed down 6.2% to 45.25 pence per share last night.
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