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.

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

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

House prices could fall 30%. Should investors be worried about a repeat of 2008?
Investments

House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 201…
24 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023