Greka Drilling secures $2.5m loan

AIM-listed unconventional oil and gas driller Greka Drilling has secured a $2.5m loan, which will be used to pay creditors and for working capital purposes.

The loan is at an interest rate of 7% per year and is repayable at the end November 2018 or, at the option of the lender, between 1 January 2018 and 31 May 2018 through the transfer of the ownership held by the company of the leases of the 28th and 29th floors of the office building in Zhengzhou, PRC where its Chinese operational headquarters are based.

The net book value of these properties at 31 December 2016 was $4.9m and there are bank loans of around $2.9m secured on these properties.

The loan has been provided by GRECAP Limited, which is controlled by Randeep S. Grewal, a director of the company. As a result, it constitutes a related party transaction under the AIM rules for companies.

At 1225 BST, the shares were down 13% to 2.54p