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IGas Energy confirms it will cut out US$112mln of debt though its financial restructuring

IGas is bringing in up to US$60mln of new capital and exchanging around US$112mln of debt for new shares.
IGAS ENERGY TANKER TRUCK
The new share placing funding is backed by private equity investor Kerogen Capital

IGas Energy Plc (LON:IGAS) has revealed the extent of its proposed financial restructuring, with the debt-for-equity element expected to substantially reduce its debt.

The UK shale gas group told investors that it will reduce debt from US$122mln to a maximum of US$10mln by issuing new shares to its lenders.

At the same time, it is raising US$55mln of new equity in a share placing anchored by private equity group and cornerstone investor Kerogen Capital.

Existing shareholders will also be given the opportunity to buy new shares, via a US$5mln open offer.

All new shares will be issued at a price of 4.5p each (Thursday’s closing price was 5.25p).

IGas chief executive Stephen Bowler said: “We are pleased to announce the final terms of a restructuring package which, together with our new strategic investor, Kerogen, and the support of bondholders and shareholders would result in a strong balance sheet that, in this oil price environment, would enable us to focus on delivering the significant potential of our production and development assets.”

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A US$35mln injection of fresh funds from strategic investor Kerogen Capital and a debt-for-equity swap with its lenders is underway

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