PetroNeft agrees extension to convertible loan facility

Russia-focussed oil and gas explorer and producer PetroNeft updated the market on its financing on Friday, announcing an extension to the remaining balance on its convertible loan facility.

The AIM-traded firm had agreed the facility of $1.3m with a group of five lenders in June 2019, with a revised maturity date of 31 December 2021.

Throughout 2021, the five lenders at various times converted 65% of their loan advance into shares in PetroNeft.

PetroNeft said it had now agreed with the five lenders to extend the term of the remaining loan balance of $0.46m, with the maturity date being extended to 31 December 2022.

The interest rate would remain at 8% above LIBOR, and the remaining balance could be converted fully at 0.06p per PetroNeft share at any time up to the revised maturity date, at the loan holders’ choosing.

PetroNeft said the loan was provided by a group of five investors, four of which were related parties under the AIM and Euronext Growth Market rules.

The directors of the company not linked to the loan, having consulted with the company's advisor, said the terms for the facility’s extension were “fair and reasonable” insofar as the company's shareholders were concerned.

“PetroNeft is a tight team, and we continue to benefit from the experience and expertise of our senior management team to devise and deliver a fiscally robust capital structure to drive the business forward,” said chief executive officer David Sturt.

“I believe the agreed loan extension is a welcome development, combined with the added opportunity for the investors to convert at 0.06p per ordinary equity share, which represents a significant 52.6% premium above the average closing for the last five trading days, and is a further vote of confidence in the growth momentum PetroNeft can achieve in the coming year.”

At 1238 GMT, shares in PetroNeft Resources were up 0.35% at 4.32p.