Linc provides financial restructuring update
JOHANNESBURG (miningweekly.com) – Oil and gas company Linc Energy has obtained the required majority consent to effect an amendment to the terms of its $265-million, 12.5% senior secured notes, due 2017.
Revision would include an option for the company to capitalise the coupon payments due on the notes in October 2015 and April 2016.
If Linc elected to capitalise these coupon payments, the coupon would be calculated at 14%, but if it chose to cash settle the coupon payments, it would calculated at the current 12.5% rate.
Upon the sale of any material assets of the company’s oil and gas subsidiary, Linc Energy Resources, the proceeds would be used to pay down US secured debt in order of priority at the respective call prices contained within the indenture documents at the time of sale.
The company has sought and has agreed to these revised terms with over 95% of the holders of the notes to manage its cash flow in the current oil price environment, while performing a capital restructuring. Should 100% of the note holders approve of the terms within the next month, the company would amend the existing notes. If not, Linc would effect the amendments by way of an exchange offering with the consenting note holders.
Meanwhile, Linc reported that it has appointed the Royal Bank of Canada as its financial adviser to assist in the execution of strategic initiatives focused upon reshaping its capital structure.
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