IGas shares closed down more than 9% on the day after the company’s bondholders disagreed in votes over proposals to relax liquidity obligations.
Holders of IGas unsecured bonds who attended a meeting today voted unanimously for a proposal to waive liquidity covenants. But the proposal was not accepted by holders of secured bonds, who voted 43.6% in favour.
In the half-yearly accounts published earlier this month, IGas forecast it would not meet its daily liquidity commitments in the second half of October and sought a temporary waiver of its obligations. The company raised questions about its ability to operate as a going concern.
IGas said in a statement this afternoon that the waivers, amendments and authorisations for unsecured bonds sought by the company were now effective. But it said the waiver and standstill requests for secured bonds were not approved.
The statement said some secured bondholders preferred a capital restructuring of the group. Others preferred a divestment of its conventional assets.
The statement said the latest cash forecasts indicated the company would break its daily liquidity commitments next week (week starting 31 October 2016).
The statement said:
“In the event of a breach, the Company expects a 10 Business Day grace period to apply to allow it to pursue options, including the sale of bonds or other assets, and expects to remedy any such breach before an Event of Default in respect of the secured bonds occurs.”
The company told investors it had US$27.5 million in cash and held US$21.1 million of its own bonds. It expected to meet financing and trading obligations.
The statement added:
“The board continues to believe that a consensual solution is possible and that it would be in the interests of all stakeholders.”
IGas also said it was “continuing to pursue discussions with a number of strategic investors”.
IGas shares closed at 12.50p, down from 13.78p yesterday.