LONDON (ShareCast) - (ShareCast News) - UK onshore oil and gas explorer and producer IGas Energy announced the final terms of a proposed capital restructuring that it believed would will result in a new capital structure which would be sustainable in the current oil price environment.
The AIM-traded firm said it was looking to become well-positioned to capitalise on value accretive opportunities alongside its $230m carried work programme.

It proposed a new equity fundraise to raise approximately $55m from a subscription by a new investor, Kerogen; a placing of shares with institutional investors; and a subscription by certain of the directors, certain of their spouses and certain third parties.

IGas also confirmed a subscription by existing shareholders under an open offer for up to €5m, a debt-for-equity swap in respect of all the unsecured bonds through a bondholder vote, and a debt-for-equity swap in respect of some of the secured bonds through a voluntary equity exchange and/or bondholder vote.

The secured bonds would convert to equity at 100% of par value and the unsecured bonds would convert to equity at 62.5% of par value.

Its board said it received signed undertakings to vote and written indications of support in favour of the bondholder-approved transactions from approximately 75% of the secured bondholders and approximately 61% of the unsecured bondholders.

The Company's overall net debt reduced from $122m at 31 December 2016, to what the board said was no more than $10m by the cancellation of all of the unsecured bonds through a bondholder vote, a cancellation of up to $60m of secured bonds in consideration for the issue of new shares through a voluntary equity exchange and/or bondholder vote, and a cancellation of part of the secured bonds following a repurchase in consideration for cash payments through a voluntary cash offer or a bondholder vote.

"We are pleased to announce the final terms of a restructuring package which, together with our new strategic investor, Kerogen, and the support of bondholders and shareholders would result in a strong balance sheet that, in this oil price environment, would enable us to focus on delivering the significant potential of our production and development assets," said CEO Stephen Bowler.

"We are delighted with the support that we have received from bondholders and from new investors coming in on the placing and we are also pleased to provide an opportunity for our existing shareholders to participate at the same price, via the open offer."

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