IGas Energy Plc (LON:IGAS) shares were lower heading into Wednesday’s close after bondholders cast their votes on proposals put forward by the company to relax liquidity obligations.
A quorate of holders of the group’s unsecured bonds (56.2% of voting bonds were represented at the meeting) voted unanimously in favour of the proposal to waive liquidity covenants, whereas 43% of a quorate of secured bond holders (68.6% of holders were represented) voted in favour.
As such waivers are now effective for the unsecured bonds, but the proposal was not approved for the company’s secured bonds.
IGas emphasised that it is in compliance with its liquidity covenants at present, albeit a breach is forecast to occur next week – which would give it 10 business days to remedy the situation before a default event under the secured bond terms.
It told investors it had US$27.5mln of cash, and it holds US$21.1mln of its own bonds.
In a statement the company said: “Notwithstanding the contractual requirements in the daily liquidity financial covenants set out in the bond agreements, the company therefore continues to meet, and expects to continue to meet, its actual ordinary course financing and trading obligations.”
IGas told investors that it continues to believe that a consensual solution is possible, and it said that would be in the interests of all stakeholders.
The company added: “From its various discussions and the result of the secured bondholders' vote, the board believes that there are divergent views among those bondholders.
“These include the preference for a capital restructuring of the group or a divestment of its conventional assets.
“The board will continue discussions with its key bondholders aimed at aligning those views.”
IGas also noted that it continues to pursue discussions with a number of possible strategic investors.
On AIM, IGas shares were down 1.25p or just over 9% changing hands at 12.5p before the close of trading.