Greenfields Petroleum gets temporary waiver of 9% debenture payments

By Caroline Salls

Pittsburgh, Dec. 4 – Greenfields Petroleum Corp. secured temporary relief from the interest payments on its 9% convertible unsecured debentures by way of a waiver from the holders of more than 50% of the principal amount of the debentures, according to a news release.

On June 30, a majority of the debenture holders instructed the trustee to waive an event of default resulting from the failure by the company to make the interest payment due on May 31, 2015.

Under that waiver, the May interest payment was deferred until the earlier of Dec. 30 and 15 business days after the receipt by Greenfields Petroleum International Co. Ltd. (GPIC) of payment from Bahar Energy Ltd. of at least $9 million of the default amount.

On Friday, a majority of the debenture holders instructed the trustee to waive any event of default occurring as a result of the failure by the company to make the May interest payment or a November interest payment until the earlier of June 30, 2016 and 15 business days after the receipt by GPIC of payment from Bahar of at least $9 million of the default amount.

GPIC is a wholly owned subsidiary of Greenfields Petroleum and holds a 1/3 interest in Bahar. The company said Baghlan Group Ltd., the other shareholder in Bahar, has failed to fund its share of the costs of Bahar in accordance with a shareholders agreement and its loan funding obligation since January 2014.

Under the shareholder agreement, in the event of a default by a shareholder in a funding obligation, the other shareholder is required, by additional loan, to provide funds to Bahar. As of Nov. 30, the company said GPIC has funded more than US$22.1 million to cover the defaulted obligations of Baghlan.

Greenfields said the total amount due to GPIC as of Nov. 30, including repayment of the default amount loans, interest and costs, is estimated at $28.1 million.

As previously reported, receivers have taken control of Baghlan and are seeking to sell either Baghlan or its interest in Bahar. On June 17, Baghlan filed for an order appointing a liquidator in the British Virgin Islands.

Greenfields said it is optimistic that the purchaser will pay the default amount and related interest and costs owed by Baghlan, ultimately resulting in a payment to GPIC of the default amount. The company said the waiver from the debenture interest payments is intended to provide financial relief pending that repayment.

Houston-based Greenfields Petroleum is an oil and natural gas company focused on reserves in the Republic of Azerbaijan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.