Xcite Energy gets holder OK to extend $135 million bonds to Sept. 30

By Susanna Moon

Chicago, June 30 – Xcite Energy Resources plc said holders voted to approve the restructuring of its $135 million senior secured bonds and to extend the bonds to Sept. 30, 2016 from June 30, 2016.

At the meeting held Thursday, there were enough holders to for a quorum and the measure attained 100% of the votes cast, according to a company notice.

As announced June 16, parent company Xcite Energy Ltd. has been in talks with its principal bondholders for a potential restructuring, which is likely to involve a reduction to the balance of the bonds in return for an equity stake in the company.

The bond maturity extension would allow the negotiations to continue, the previous release added.

Xcite Energy Resources is agreeing to amend the bond agreement dated June 27, 2014 so that an event of default would occur if:

• The constitutional documents of the issuer or the company were to be amended;

• The shareholder rights plan agreement dated Nov. 30, 2010 between the company and Computershare Investor Services Inc. were to be amended, extended or replaced; or

• Any options, warrants or other rights to purchase, subscribe for or acquire any of the shares in the issuer or the company were to be granted to any person other than an issue of shares in the company for cash at or in excess of fair market value.

The issuer is also requesting amendments to:

• Reduce the notice period for a bondholders' meeting to five business days from 10 business days;

• Allow a written resolution procedure to be used in lieu of a bondholders meeting, to simplify and speed up the voting process for bondholders when the terms of a restructuring are agreed upon and presented to the bondholders; and

• Effect a staged reduction in the figure for the minimum cash balance undertaking during the period of the maturity date extension so that the balance on the group balance sheet is equal to or higher than a particular stated balance at the end of each calendar month.

The issuer also agrees that if the amendments to the bond agreement are approved, it will continue to make interest payments for the bonds when they become due during the period of the extension, with the next interest payment dates falling on June 30 and Sept. 30. From June 30, interest will accrue and be paid in cash or in kind at the issuer's option on each interest payment date, and any interest paid in kind will be compounded on a quarterly basis on each interest payment date. If the issuer fails to pay interest during the extension, it will constitute an immediate event of default.

In return for, and as a condition to, the bondholders approving the amendments to the bond agreement, the issuer is required to pay a consent fee to the bondholders of 1% of the principal amount of the outstanding bonds as of June 30.

Bondholders holding more than 93% of the outstanding bonds had indicated their support for the proposed amendments, the release noted.

Liberum was the joint broker (+44 0 203 100 2222) as was Morgan Stanley (+44 0 207 425 8000).

The issuer is the U.K. subsidiary of Xcite Energy Ltd., an oil exploration and development company based in Tortola, Virgin Islands.

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