Circle Oil's financial waiver reinstated, repayments deferred to 29 January

The International Finance Corporation, a member of the World Bank, and syndicate members have agreed to reinstate Circle Oil’s financial waiver until 26 January 2017 as the oil and gas explorer continues to be “under significant pressure”.

The IFC reinstated the company's recent waiver in relation to the suspension of the December 2015 and June redetermination, as repayments due under its Reserve Based Lending facility was due to expire.

The IFC and other syndicate members also agreed to defer interest payments which were due from July and November to 26 January.

A syndicate member and the IFC said they would provide additional stand-by funding to finance a strategic review of the company, which was agreed following an interim funding deed between IFC, the company and its subsidiaries. Any advances will be repayable by 31 January.

The company said that if it draws down on the facility any payments received from the Egyptian General Petroleum Corporation during the period to 31 January will be used to reduce the amount drawn. The effective interest rate for the standby funding is 15% per annum plus three-month LIBOR.

Circle Oil’s shares were suspended on AIM and if the suspension is not lifted by 30 December, the company expects its listing on AIM to be cancelled.