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ZaZa Energy in talks with 8% noteholders to consider PIK interest
By Marisa Wong
Madison, Wis., Nov. 13 – ZaZa Energy Corp. is in advanced discussions with the holders of its 8% subordinated notes due 2017 to amend the notes to be able to make interest payments in kind, according to an 8-K filing with the Securities and Exchange Commission.
The company wants to make interest payments in kind beginning with the January 2015 interest payment and continuing until it deems appropriate, given its balance sheet at the time.
If cash interest payments are converted to payments in kind, it will save the company an annualized $3.8 million in cash.
ZaZa had previously announced an agreement to exchange the 8% notes for 13% perpetual preferred stock and common stock, but the conditions to that transaction have not been satisfied. If the company amends the 8% notes to provide for PIK interest, no shares of preferred stock or common stock will be issued in exchange for the 8% notes.
Houston-based ZaZa is an onshore oil and gas exploration and development company.
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