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Published on 3/3/2017 in the Prospect News Canadian Bonds Daily, Prospect News Distressed Debt Daily and Prospect News High Yield Daily.

Iona Energy bondholders to vote on share capital sale deal March 10

By Caroline Salls

Pittsburgh, March 3 – The holders of Iona Energy Co. (UK) Ltd.’s 9˝% secured callable bond issue 2013/2018 will vote on a proposal related to the sale of its share capital to Decipher Energy Ltd. at a meeting scheduled for March 10, according to a notice released by bond trustee Nordic Trustee ASA.

As previously reported, Iona’s joint administrators and the bond trustee entered a conditional share sale and purchase agreement with Decipher Energy Ltd. on Feb. 21.

Under the agreement, Decipher would acquire the Iona shares for $1.00.

In addition, Decipher would fund or otherwise cause Iona to procure a $2 million payment upon completion of the agreement to allow distributions to Iona’s creditors under a voluntary arrangement, a $1.5 million repayment of the principal amount of the bonds and a $495,030 payment for participants of Iona’s management incentive plan.

Following the reduction of the outstanding bonds and any interest to $5 million and the $1.5 million payment, Decipher would fund or cause Iona to procure the funding for the repayment of $3.5 million of the bonds, subject to deferred payment conditions.

The conditions include an extension or continuation of an Orlando license until at least June 30, 2018 or the granting of a new license.

The company said it will seek bondholder consent to enter into the Decipher sale and purchase agreement, amend the bonds to allow implementation of the Decipher transaction and to reduce the amount outstanding under the bond agreement.

Specifically, bondholders will be asked to approve a pre-completion agreement, approve the trustee making a demand against a Huntington subsidiary guarantee, approve entry into a June 2016 New West Wick working interest sale agreement, approve a release of bond debt down to a principal amount of $5 million, authorize a payment plan and authorize payments of various costs and expenses.

Iona Energy is a Calgary, Alta.-based oil and gas company with assets in the United Kingdom’s North Sea.


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