(MENAFN- ProactiveInvestors - N.America) LGO Energy Plc's (LON:LGO) finances have received a shot in the arm with the Trinidad focussed oil company restructuring its debt and simultaneously raising 3.25mln of new funds from investors.
BNP Paribas the company's lender has agreed a new indicative repayment schedule for the outstanding debt. And by offsetting cash set aside as security it has reduced the debt to US$4.87mln.
A new repayment schedule sees LGO pay an average of US$286000 per month which is about half the previous monthly repayment. These repayments are now expected to run until September 2017 and the new arrangement begins with the May 2016 payment.
LGO told investors that the cash injection coming via a share placing will provide working capital. It is issuing 1.6bn new shares to institutional investors at a price of 0.2p per share.
As a result of the funding it has now reached agreements with all material trade creditors relating to the 2015 drill programme at the Goudron field.
Now LGO says it can refocus its efforts on increasing oil production from its Goudron field.
'The board are pleased to have secured institutional backing to address the remaining trade creditors from the 2015 drilling campaign at Goudron' said Neil Ritson LGO chief executive.
'Well recompletion work is now underway to raise production and is showing encouraging results.
'The company's primary focus is on clearing all creditors and to increase production and then to proceed to the drilling of the previously announced Goudron Sandstone well program as soon as practical."
LGO highlighted that due to its progress the company is no longer pursuing the US$20mln convertible debt arrangement previously announced in February.
It also noted that the BNP Paribas loan remains 'at call' and the company continues to explore ways to further restructure the debt liability so that the current technical default covenants can be fully remedied.
And LGO intends to start new talks which it hopes will lead to early repayment of the remaining debt to BNP Paribas.
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