TØRSHAVN, Faroe Islands – Atlantic Petroleum has called for a bondholder meeting later this month to consider proposals in connection with potential transactions arising from Iona Energy’s M&A process.
The company said it was pursuing a solution in parallel with Iona’s process and is in dialogue with a London-based party regarding its 25% equity in the Orlando project.
In late November, Iona announced that it was “highly likely” that its UK subsidiaries Iona Energy (UK) Co. plc and Iona UK Huntington Ltd. would begin insolvency procedures. Iona previously announced a proposed restructuring exercise under which it would farm out of the Orlando and the Ronan prospects to an unnamed upstream subsidiary of a global energy company. However, this proposed restricting deal fell through, pushing Iona closer to insolvency.
“The Orlando farm out was a key component of the restructuring,” Iona said in mid-November. This now means that the restructuring cannot be completed as proposed. In the absence of the Orlando farm-out and the lack of a deliverable funding solution for Atlantic Petroleum's share of Orlando costs, significant additional funding is required to ensure Iona can finance its share of capital expenditures related to the Orlando project.
“Having reviewed a range of alternatives and met with a large number of equity and debt providers and strategic counterparties during 2015, the management and board of Iona do not believe there is any reasonable prospect of obtaining alternative funding in the current commodity price environment and within the required timeframes,” Iona’s statement concluded.
In its statement released today, Atlantic Petroleum said it expected to be able to provide a further market update next week.
“At this time, there is no certainty that a solution or a satisfactory outcome will be forthcoming for the company and falling that, it is likely that the company will go into administration or restructuring. The company is continuing its planning for all outcomes,” it concluded.