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JKX Oil & Gas gets approval to restructure $16 million 8% convertibles
By Angela McDaniels
Tacoma, Wash., Jan. 3 – JKX Oil & Gas plc received approval to restructure the 8% guaranteed convertible bonds due 2018 issued by JKX Oil & Gas (Jersey) Ltd., according to a company filing with the London Stock Exchange.
The final deadline for the receipt of electronic consents was 7 a.m. ET on Jan. 3. The resolution was approved by the holders of 88.75% of the $16 million outstanding principal amount of convertibles.
JKX sought to mitigate the “liquidity risk” posed by a put option in February, according to a Dec. 9 filing. Including accrued interest and accretion premiums, the total redemption price would have been $18.6 million if all of the outstanding convertibles had been put back.
Some of the convertibles are held by Proxima Capital Group and Neptune Invest & Finance Corp., who are both related parties of the company. Under the terms of the restructuring, the company's related parties will receive an additional interest yield of up to $3,876,000 in aggregate if the convertibles are held up to the amended date of maturity.
The terms of the consent solicitation were amended on Dec. 14, although the details of the changes are not available. Under the original terms announced Dec. 9, the company was seeking consents to fix the total outflow in February at $2.6 million, composed of accrued interest and accretion payments; increase the coupon to 14% from 8% and amortize the remaining convertibles in three equal annual installments beginning in February 2018.
The restructuring required approval by holders of at least three-fourths of the outstanding convertibles.
The company said on Oct. 19 that it had bought back another $6.4 million of the convertibles at an average price of 94% of par and that it was looking at various restructuring options for the remainder of the convertibles.
JKX is an oil and gas exploration and production company in London.
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