Caza Oil & Gas (LON:CAZA) has told investors that its lender, Apollo Investment Management, has agreed to further leeway on the group’s US$45mln debt.
As part of the debt facility, the company’s finances were ‘tested’ quarterly and after the second quarter Caza was not in full compliance of the debt terms, though Apollo had agreed a temporary waiver of certain financial covenants.
That forbearance period has, after November 30, been extended until December 31 2015.
It has been agreed on the basis that Caza is expected to conclude a financing or a complete refinancing that will enable the debt to Apollo to be repaid.
Caza today repeated that it has, since early October, been in advanced discussions with a third party regarding a potential equity financing.
“If the potential transaction is consummated, it is likely to take the form of an equity investment in the company which, given the current oil and gas commodity pricing environment, is likely to subject the company's existing shareholders to significant dilution,” Caza said in a stock market statement.