IGas Energy PLC (LON:IGAS) has called a meeting with its bondholders where it will seek waivers to obligations regarding its cash holdings.
The group, which has around US$27.6mln of cash, had previously flagged that in October it would reach a level of ‘non-compliance’ with the daily liquidity covenant written into its bond terms.
IGas is now seeking a temporary waiver to the bond terms, and it said the associated bondholder meeting would be a platform for talks to agree a sustainable capital structure for the group.
IGas noted that its significant cash resources are expected to be sufficient to meet its ordinary course financing and trading obligations for a sustained period of time, extending through and beyond the proposed waiver period.
The company added that it continues to pursue other options, including the sale of bonds or other assets or entering into a pre-paid swap of its oil production in 2017.
It noted: “At the same time, IGas continues to pursue discussions with a number of strategic investors and is evaluating options for cash and earnings accretive transactions, including farm-outs and other asset portfolio management opportunities to improve its cash position and de-leverage its balance sheet to achieve a capital structure that is sustainable in the current oil price environment, as well as enabling the company to capitalise on value accretive opportunities.”
The bondholder meeting will take place on October 26. If agreed, the waiver would become effective immediately.