Struggling oil firm Afren is in rescue deal discussions with bondholders and other lenders after announcing at the end of last week that it had terminated talks with Seplat Petroleum over a potential combination.
The company said it was continuing discussions with the advisers to its largest bond holders “regarding the immediate liquidity and funding needs of the business” and is also in talks with existing stakeholders and new third party investors with a view to recapitalising the company.
At the end of January Afren’s share price plunged by 72 per cent when it revealed it needed a cash injection of $200m (£130m) to stay afloat. The firm has lost about 95 per cent of its market value since June.
More on this story: What went wrong for Afren?
The company, which has been rocked over the past few months by corporate governance scandals, plummeting oil prices and difficulties in its operations, announced in December that Seplat had made an approach. The deadline for an offer was extended twice as the two organisations attempted to hammer out a deal.
However, on Friday Afren stated: “The board has not received any proposal from Seplat that it believes is capable of being implemented on terms satisfactory to all relevant stakeholders in the company, including the indicated value being significantly below the aggregate value of the debt of the company.”
It added that continuing discussions with Seplat “is not in the best interests of the company’s stakeholders” and declined Seplat’s request for a further extension of the deadline.
Afren declined to comment yesterday.