DUBLIN, Ireland – Sunny Hill Ltd. has made an all-cash offer to buy Petroceltic International plc at a rate of 3 pence per share, or about £6.42 million ($8.93 million).
The Financial Times placed the offer at 84% less than its previous closing value. Petroceltic urged its shareholders to take no action, and noted that a statement was forthcoming.
Sunny Hill is a wholly owned subsidiary of Worldview Capital Management, Petroceltic’s largest shareholder, and was recently established specifically to make this buy-out offer. The proposal comes in a little more than a month after Worldview presented the company with another all-cash offer.
“The directors of Sunny Hill believe that the value of the equity in Petroceltic is close to zero, given the parlous financial position of the company,” Sunny Hill said in a statement, before proceeding to say that it was offering 3 pence per share “as an incentive to Petroceltic shareholders to accept the offer, in order to allow Sunny Hill and Worldview to accelerate addressing the company’s indebtedness issues.”
As a result of the current market conditions, Petroceltic has been suffering from liquidity and debt issues, announced last week that it had received another waiver of repayments under its Senior Bank Facility, to March 4.
Sunny Hill referred to the recent waiver and the company’s debt to the Senior Bank Facility as “precarious and worsening.”
The struggling Irish explorer announced in December 2015 that it currently owes facility $217.8 million, although its cash balances total around $28.1 million. The company continued by saying that it “did not have certainty on liquidity beyond early January 2016.” Its lenders provided a limited advance of new funds to enable a variety of funding and portfolio management initiatives to be pursued.
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