Iona Energy approved to extend long-stop date for restructuring

New York, Sept. 30 – Iona Energy Inc. said bondholders approved an extension in the long stop date for completion of its restructuring to Nov. 30 from Sept. 30.

A meeting held Wednesday passed a motion allowing the additional time.

The approval required a two-thirds majority.

As announced on Sept. 23, the restructuring was approved by the bondholders of Iona Energy Co. (UK) plc at a meeting held Aug. 6 but the company said it has since realized that it needs more time to finalize some of the documentation.

The company said it has received “strong” support from the ad hoc committee of bondholders.

“The restructuring and all its constituent transactions or arrangements are in agreed form but remain subject to negotiation and execution of final documentation,” the company noted.

Holder approval obtained

As disclosed on Aug. 6, Iona said it received bondholder approval to refinance its 9˝% senior secured callable bonds due 2018.

The proposed measure obtained 97.61% of the votes cast.

The key terms of the proposal included the following:

• The sale of a 25% working interest in the Orlando asset in consideration for payment of the company’s share of the development costs for the Orlando oil field up to $25.5 million, plus additional cash payments to the issuer after first oil at the Orlando asset;

• The provision of deferred payments or loans of an estimated $33 million, repayable in installments within nine months following first oil;

• A cash repayment to bondholders of $24 million on the outstanding bond debt on the restructuring implementation date;

• A reduction of the outstanding debt under the bond to $120 million with effect from the restructuring implementation date, and the swap of the outstanding bond debt exceeding $120 million in exchange for Iona common shares representing 87% of the issued and outstanding common shares as of the restructuring implementation date; and

• The ability for the issuer to use $31 million of the restructured funds currently held in the escrow account to achieve first oil at the Orlando asset.

Iona issued $275 million of the senior secured bonds on Sept. 27, 2013 through its U.K. subsidiary, Iona Energy Co. (UK) plc.

Iona is a Calgary, Alta., oil and gas company with assets in the United Kingdom’s North Sea.

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