Oil and gas exploration company PetroNeft said it had converted almost $2.7 million (€2.29 million) of debt to equity under three convertible loan agreements. The agreements saw the issuance of more than 115.7 million new shares, with the company’s largest shareholders, directors and senior management participating.
PetroNeft previously entered into three convertible loan agreements: one in 2019 for $1.3 million with a group of five lenders who had the right to convert up to 65 per cent of the outstanding loan amount; a $2.9 million agreement in February, with a group of 13 lenders that had the right to convert 75 per cent of the outstanding loan to shares; and a deal agreed in March as part of the acquisition of the additional interest in Licence 67 in the Tomsk Oblast, Russian Federation,
The conversion reduces outstanding debt under these agreements from $5.9 million to $3.2 million.
"While these convertible loans were essential to the survival of PetroNeft, a key element of the ongoing work to turn the company around is reducing its indebtedness and moving it on to a sounder footing. This is just as important as the operational success that we have had in the last eighteen months across our licences. Furthermore, it is critical to allow us the finance to carry out the development activity which will release the value of the company," said David Sturt, chief executive of PetroNeft Resources.
“We are very pleased to be able to announce exercise of these conversion rights as it reduces the level of debt of the company by a substantial amount and at the same time demonstrating significant support by the lenders, which includes our two largest shareholders along with board directors and senior management.”
