Investors watch share movements as IGas avoids covenants breach


IGas investors were watching share price movements this morning after news that the company would not breach its daily liquidity obligations this year.

The group announced yesterday afternoon it had realised $6 million by selling secured bonds with a nominal value of $8 million.

An IGas statement said the company forecast it would comply with the daily liquidity covenant until March 2017 when the next interest payments on secured bonds were due.

Shares jumped 25% on the day to close at 13.68p. But this morning most of the gains had been lost and at the time of writing the price stood at 12.15p.

IGas said the proceeds of the sale were available for general corporate purposes.

The company continued to predict it would not comply with its leverage covenants at 31 December 2016.

The statement said:

“In the event of a breach of either leverage covenant, an equity cure provision exists within the bond agreements, such that a breach can be cured within 25 business days of the delivery of the compliance certificate for that period.”

The statement added that discussions were continuing with key stakeholders and strategic investors over the group’s capital structure.

IGas statement

Categories: Industry

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1 reply »

  1. So, Igas has saved itself to fight another day, but it isn’t out of the woods, and by adding to its debt, has not helped itself in respect of its gearing covenant obligations in December.

    Adding to debt won’t help it with OGA’s gearing and interest cover financial viability criteria either.

    If newly issued bonds end up in TEOG’s hands, then it really is frying pan and fire time.

    For the impending Springs Road application, this does not remove the uncertainty of recent weeks, and suggests that Igas’ structure and possible ownership will be subject to uncertainty for some time to come. If NCC approves the application, NCC will be taking a punt on the shape, financial robustness and identity of the organisation that has an explicit obligation to restore the site once the exploratory wells have been drilled.

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