Ascent Resources granted loan to repay debts
Ascent Resources has been granted another loan to repay debts and finance projects in the New Year.
Ascent Resources has been granted another loan to repay debts and finance projects in the New Year.
The European-focused oil and gas exploration company has entered into an agreement with Henderson Global Investors and Henderson Alternative Investment Advisor for the subscription of convertible loan notes of up to £5.5m.
Part of the funds will be used to repay the firm's £2.3m loan from YA Global Master SPV, an investment fund managed by Yorkville Advisors. The Yorkville loan facility charge an interest rate of 9% per annum. Ascent owed £1.9m by December 2012, in addition to about £0.8m of debt to Cento Bank in the company's Italian subsidiary.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
While the company had sufficient cash resources to meet overheads until year end, it needed the loan to meet overheads and to continue making repayments to Yorkville and Cento bank of £1.9m and cira £350,000 respectively.
The company attributed a decline in sales and demand of hydrocarbons for its underperformance.
"Monthly revenues from the sale of hydrocarbons are declining, as expected, as the field nears towards the end of its life over the next 12 to 18 months and hence the company does not currently have the capital resources to make its loan repayments and also meet its other obligations," the company said in a statement.
"The company has therefore sought other sources of financing, including additional loans from major shareholders and other third parties."
The loan will also be used to finance its Petiovci Project in Slovenia, which has been stalled awaiting various signatures that have been unreasonably withheld.
The convertible loan will be issued in units of £1 and interest will be at a fixed rate of 9% per annum, which will be rolled up quarterly in arrears and included as principal to be repaid or converted.
The news sent the share price plunging 35% to 1.02p by mid-morning.
RD
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Christmas at Chatsworth: review of The Cavendish Hotel at Baslow
MoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
By Dr Matthew Partridge Published
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published