IGas talks to potential investor ahead of predicted breach of commitments

IGasIGas said this morning it was having talks with a “potential strategic investor” as it headed towards a predicted failure to meet  financial obligations.

A company statement said it forecast it would not comply with its leverage covenants as at 31 December 2016.

But it said discussions with the investor were “well-progressed” and ongoing.

An agreement would, the statement said, “remedy any leverage covenant breaches as at 31 December 2016”. It would also remedy the forecast breach of daily liquidity covenants predicted for late March 2017, when the next interest payment on secured bonds was due.

The statement added:

“there can be no certainty that an agreement will be reached”.

On 26 October, IGas asked bondholders to waive the company’s daily liquidity covenants. Holders of unsecured bonds agreed but the secured bondholders did not.

Five days later, the company confirmed it was in talks with Trans European Oil & Gas (TEOG), thought to be a leading holder of its secured debt. TEOG had proposed the sale of IGas’s conventional assets, which include oil and gas fields in southern England, the East Midlands and sites in north-west England.

In early November, IGas avoided a breach of its daily liquidity obligations by selling secured bonds with a value of $8 million.

This morning, it said:

“The Company has recently met with certain of the Company’s bondholders and potential strategic investors to discuss its capital restructuring options and valuation of the Company, as it continues to assess options which will allow a new capital structure for the Company that is sustainable in the current oil price environment and enables IGas to capitalise on value accretive opportunities.”

The statement confirmed that IGas had another five months in which to deal with the breach of the leverage covenant expected at the end of this week. IGas suggested it could inject additional equity to cure the breach.

The compliance certificate on the covenant for the 12 months ending on 31 December must be delivered by 30 April 2017. According to legal advice, IGas said it could cure a breach within 25 days of delivering the certificate. That would mean the latest date for the equity cure would be early June 2017.

The statement added that IGas cash resources stood at $32m at 22 December 2016.

At the time of writing (1pm), the IGas share price was down 7.25% at 10.78p.


43 replies »

  1. Renewable programme?? Yes, I suppose if you keep growing trees, in a few million years you might get some more coal.

    “An infinite free source energy supply”-only if you belong to the magic circle.

    I want a government to STOP spending my money on low carbon energy UNTIL they have a joined up plan. I do not need an empty vessel of a leader supporting low carbon energy with filthy coal whilst her car industry fills the world’s hospitals with lung problems, or our own “leaders” progressing expensive Hinkley Point just to balance their green credentials (looking after their CV for the future.) To be fair, they arrived at a point where there was little alternative, BUT they should not have arrived at that point.

    I really would suggest John that you cease quoting what the majority of the German public are in favour of. I don’t think history is on your side. Equally, they are tied into an over valued currency, within a market that is shrinking rapidly in relation to the rest of the world, where they will have limited ability to trade. The risk of being left behind will be governed by simple maths. and being part of a market shortly to represent 5% of the world’s population seems pretty simple maths to me.

  2. John,

    How about comparing emissions per capita to see how we stack up against Germany:

    It only goes up to 2014 but it does appear that Germany (11.45 tonnes CO2 equivalent) is significantly higher than the UK (8.65 tonnes CO2 equivalent). Why is the difference so huge? Which is better for climate change?

    Here is another link which tells the same story:

    Lots of interesting stuff to consider… UK is well above Germany in the “Final Rankings”. There is nothing in these statistics which indicates we should be more like Germany?

  3. this has to be the best way to travel, it doesnt say how it is powered, perhaps battery and compressed air? Not gas or fossil fuel i think? but most certainly has fossil fuel derivatives involved.
    A liitle New years foretaste of things to come perhaps?

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