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Small cap highlights: Gulf Keystone, Circle Oil, Aqua Bounty and others

Published: 09:30 22 May 2016 BST

Stressed trader

Debt laden Gulf Keystone Petroleum Limited (LON:GKP) advanced around 20% this week as speculators have piled hoping a Houdini deal can be struck to save the company.

The Kurdistan-based oil producer has some US$575mln of bonds outstanding, with most of the debt due for repayment next year.

And, the company also needs to raise US$71-88mln of new capital, if it is to keep up investment in the flagship Shaikan field.

It has agreed a deal with the majority of its lenders to hold off its most recent interest payments, and has today been given until the end of the month to come up with a restructuring deal.

Richard Savage, analyst at Mirabaud, doesn’t expect bondholders will spike the London Stock Exchange listed company – as “it may not sit well” with the Kurdistan authorities, which would complicate matters for whoever may pick up the assets next.

Highlighting the ‘tribulations’ faced by the bondholders of Afren, which collapsed amid debt defaults last year, Savage highlighted that the Gulf Keystone lenders must tread a careful line.

In a note, he said: “equity investors should brace themselves for dilution but the chances of being wiped out are minimal.”

Gulf Keystone was priced at 5.28p on Friday. Just a year ago the share was changing hands more than 10 times the current level, at around 580p.

Elsewhere, hope appears lost for shareholders in Circle Oil Plc (LON:COP).

The Egypt and Morocco focussed producer revealed it has received indicative offers, as part of an ongoing strategic review, but, considering its current US$77.5mln debt pile the company warned there could be little or no value left for shareholders.

AIM-quoted genetically modified food group Aqua Bounty Technologies (LON:ABTU) leapt some 300% - rising 39p to just shy of 52p – as Canadian authorities approved its GM AquAdvantage Salmon and declared it safe to eat.

App seller Mobile Streams (LON:MOS) gave up 30% after a profit warning on Thursday afternoon.

Tomco Energy (LON:TMC) rose around 6% after revealing it was mulling over a possible move into the palm oil business - while an American shale oil venture remains on the back-burner.

Mixers firm Fevertree Drinks (LON:FEVR) fizzed higher after flagging financial results for 2016 will be materially of ahead of market expectations.

Torotrak (LON:TRK) accelerated 10% higher on Wednesday after announcing positive results from an on-engine V-Charge testing programme, conducted by University of Bath.

The variable speed supercharger for gasoline and diesel engines has successfully met the key target requirements.

Union Jack Oil (LON:UJO) rose alongside the release of its annual result, as the onshore UK oiler looked forward to the start of production from the Wressle field.

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