Niko Resources Ltd., Calgary, has agreed with various institutional lenders and noteholders on a plan that would allow Niko to maintain its core assets for at least 2 years until values can potentially be enhanced.
A standstill agreement with institutional lenders expired Jan. 15, but negotiations continued.
If the plan becomes effective, Niko believes it will have “sufficient liquidity to fund the cash requirements” of operating subsidiaries in India and Bangladesh and corporate expenses.
For the 3 months ending Dec. 31, 2015, Niko recorded a net loss from continuing operations of $27 million. Earlier in 2015, Niko closed its Indonesian office and discontinued activities there.
The proposed amendments need approval by all of the lenders, along with holders of two thirds of outstanding notes. Niko may terminate the agreements on or after Apr. 15 if all lenders do not agree.
If the plan is implemented, Niko will not be required to make interest payments during the hold period. But it will be required to make a principal repayment of $12 million on the term loans on the implementation date, and pay fees to noteholders who approve the plan “on a timely basis.”
After 2 years, the lenders may require Niko to start a sales process for its interest in the D6 production sharing contract offshore eastern India (OGJ Online, Nov. 4, 2014).