IGas liquidity waiver OK’d by unsecured, rejected by secured holders

By Wendy Van Sickle

Columbus, Ohio, Oct. 26 – IGas Energy plc said holders of its unsecured bonds approved a temporary waiver from compliance with its daily liquidity covenant, but holders of its secured bonds rejected the waiver at meetings held Wednesday.

At the bondholders’ meeting for the unsecured bonds, 56.2% of the voting bonds were represented with 100% of the votes cast in favor of the waiver, which has now been put into effect, according to a notice.

At the meeting for the secured bonds, 68.6% of the voting bonds were represented, with the 43.6% of bonds that voted supporting the waiver not meeting the majority required for passage.

IGas said on Sept. 30 that it expects to breach the daily liquidity covenant in the second half of October and that it was exploring a number of options including the temporary waiver.

On Wednesday, the company said it is in compliance with its daily liquidity covenants, but expects to breach the covenants in the week commencing Oct. 31.

In the event of a breach, IGas said it expects to enter a grace period of 10 business days to allow it to pursue options, including the sale of bonds or other assets and that it would remedy any breach before an event of default under the secured bonds occurs.

The company had asked holders to amend the notes “to provide a platform for discussions with the company's stakeholders in order to reach an agreement on a sustainable capital structure for the group,” as previously reported.

Following the rejection of the waiver amendment by the secured noteholders, the company said the board “continues to believe that a consensual solution is possible and that it would be in the interests of all stakeholders.”

“From its various discussions and the result of the secured bondholders' vote, the board believes that there are divergent views among those bondholders. These include the preference for a capital restructuring of the group or a divestment of its conventional assets. The board will continue discussions with its key bondholders aimed at aligning those views,” Wednesday’s notice states.

Meanwhile, the board also continues to pursue discussions with a number of strategic investors.

The issuer said it has “significant cash resources” of $27.5 million as of Oct. 25, down from $27.6 million as of Sept. 27, and $21.1 million par amount of its own of bonds and “expects to be able to continue to meet its ordinary course financing and trading obligations.”

For more information, call +44 0 20 7993 9899, Stephen Bowler, chief executive officer, Julian Tedder, chief financial officer or Ann-marie Wilkinson, director of corporate affairs.

Investec Bank plc (+44 0 20 7597 4000, Sara Hale, Jeremy Ellis or George Price) is the joint corporate broker and Canaccord Genuity (+44 0 20 7523 8000, Henry Fitzgerald-O'Connor) is the joint corporate broker.

IGas is a London-based onshore hydrocarbon producer, delivering natural gas and crude oil to Britain’s energy market.

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