Yuma Energy inks forbearance agreement to address restructuring goals

By Caroline Salls

Pittsburgh, Sept. 18 – Yuma Energy, Inc. entered into a forbearance agreement with YE Investment LLC, an affiliate of Red Mountain Capital Partners LLC and the new lender under Yuma’s reserve-based credit agreement, according to a news release.

Under the agreement, the lender will not exercise its rights related to the company’s failure to make scheduled interest payments due on Dec. 31, 2018, March 31 and June 30 and specified other defaults.

The forbearance agreement will expire on Oct. 26.

Yuma said all interest and principal amounts that would have been payable will accrue and be deferred until the expiration or termination of the forbearance agreement.

According to the release, the forbearance agreement gives Yuma the time required to address its restructuring goals.

In connection with the proposed restructuring, Yuma’s senior management will conduct a thorough review of its balance sheet with a plan to reduce the company’s overall liabilities, including its outstanding debt and trade payables.

“While working through the restructuring process, the company plans to continue to evaluate various strategic options to preserve the value of its business,” Yuma’s interim chief executive officer and chief restructuring officer said in the release.

The company said its financial statements for the year ended Dec. 31, 2018 and the quarters ended March 31 and June 30 outline factors that raise substantial doubt about its ability to continue as a going concern.

Yuma Energy is an oil and gas company based in Houston.

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