Shares in Afren fell today after the oil producer said it had hashed out a recapitalisation plan with its lenders.
The Africa-focused company's share price closed down 28 per cent to 4.6 pence this afternoon.
The company announced that it would receive $300m from bondholders and lenders by the end of June. Nonetheless, the agreement would leave Afren's current shareholders owning just 11 per cent of the company.
Afren urged its shareholders to approve the deal, warning that failure to do so could result in them losing the entire value of their investment.
"It is expected that the amended economic terms of the new senior notes, and the amendment and reinstatement of the existing notes, together with the requirement to initiate a sale of the group's business, will mean that existing shareholders would be unlikely to see any return on their current investments," it said in a statement to the London Stock Exchange.
Shares in Afren have shed around 90 per cent since this time last year, amid a funding crisis, and falling oil prices.
They came under pressure earlier this month after the company admitted defaulting on $15m (£9.7m) of interest payments due 1 February.
And Afren's share price tanked 72 per cent in January, after the company revealed a funding crisis and said it required a $200m (£132m) cash injection.
"We are confident Afren will emerge from this difficult period as a financially stable company capable of delivering growth in 2015 and beyond," Toby Hayward, interim chief executive of Afren, said.
"This has been made possible because of the constructive discussions we have had with the Ad Hoc committee of our largest bondholders as well as the group's senior lenders and operating partners which has resulted in the funding announced today combined with a longer term focus on recapitalising the business."
"We anticipate appointing a new chief executive shortly, who will be able to work with all stakeholders and to lead the business forward."
Afren said it reached a conditional agreement with noteholders representing around 42 per cent of outstanding debts due for provision of $200m funding in the form of super senior private placement notes (PPN) which should be issued by the end of March 2015.
This will give it time to complete the rest of its recapitalisation programme which has been agreed with the lenders of its $300m Ebok credit facility.
It's also issuing $321m high yield notes, which will provide another another $100m, and covert 25 per cent of the 2016 notes, 2019 notes and 2020 notes will be converted into equity. The remaining existing notes are being reinstated and extended 2019 and 2020 at an annual coupon of 9.1 per cent.
The Ebok Facility has been extended until 2019, and new shares will be issued to existing noteholders who subscribe for the PPN and the new senior notes.
There will also be an equity offering of up to $75m to all shareholders.