Proactive Investors - Run By Investors For Investors

Max Petroleum needs to strike financing deal to avoid insolvency

Max Petroleum needs to strike financing deal to avoid insolvency

Max Petroleum (LON:MXP) says it will be insolvent unless it is able to restructure its debts and secure new funding.

The company this morning told investors that a proposed financing deal with AGR Energy will not proceed, and talks with creditor Sberbank have been unsuccessful so far.

“The fall in the oil price since November 2014 has had a very severe adverse impact on the company's current and forecast liquidity position in 2015 and beyond,” the company said in a statement.

Ongoing talks are underway with AGR, over a new financing arrangement, which would comprise both equity-based funding and debt restructuring.

If successful the options under negotiation would render the company viable at current oil prices, Max said.

Nevertheless, the company added that time is running out for a deal to be reached.

“The directors of Max Petroleum currently believe that there is a reasonable prospect that ongoing discussions could result in a sufficient refinancing of the company and, on that basis, have not put the company into administration.”

“However, there is only a short period remaining to achieve such a refinancing and if current efforts are unsuccessful then the consequences will be negative for all stakeholders in the company.”

View full MXP profile View Profile

Max Petroleum Timeline

Related Articles

oil and gas operations
July 09 2018
Greka highlighted improved revenues which boosted gross profit despite the challenges experienced in India and China through 2017.
August 07 2018
Currently it owns 100% positions in two southern Italian licences, but Aitken says reducing its interest in either or both would allow the group to broaden its reach
onshore oil field
September 20 2018
Eland, along with its project partner, produced almost 1mln barrels of oil from the OML 40 licence in the first six months of the year, a significant year-on-year rise

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use