Hurricane Energy plc said that the High Court had today refused to sanction the company’s proposed restructuring plan for its operations on the Rona Ridge,West of Shetland.
The upstream oil and gas company added that its existing board was considering all options including an appeal.
RISK
“Unless the company or the Ad Hoc Committee successfully appeals the judgment, the restructuring plan will not be implemented,” said Hurricane in a statement.
“The company’s convertible bondholders have certain rights under the terms of the convertible bonds which, if enforced, could result in an acceleration of the convertible bonds and ultimately an insolvent liquidation of the company.
“As a result there is a significant risk of no value being returned to shareholders.”
DIRECTORS
Hurricane noted that “a number of its shareholders” had indicated that they did not support the restructuring plan and, as a result, intended to vote against the re-election of directors standing for re-election at the upcoming AGM on 30 June 2021.
They also indicated that they would vote in favour of resolutions proposed by activist investor Crystal Amber Fund Ltd* to remove all non-executive directors at the EGM on 5 July 2021.
Hurricane added: “It is the company’s understanding that, in the event all of the executive directors are removed from the board, the company’s nominated adviser is likely to resign with immediate effect.
“This is likely to have the result that the shares of the company are suspended from trading and, if a replacement nominated adviser is not in place within a period of one month, it may result in the shares of the company being de-listed from AIM.”
The High Court hearing was convened on 21 June 2021 and concluded on 23 June with judgment reserved and handed down today, 28 June 2021.
OPERATIONS
Hurricane has a 100% interest in and operates the Lancaster field, the UK’s first field to produce from a fractured basement reservoir.
The company also has a 50% interest in the Greater Warwick Area licence containing the Lincoln and Warwick assets.
*In a resolution passed in a 2013, Crystal Amber has to receive 75% backing of its shareholders in order to keep operating in its current form.
Investor, Saba Capital Management has a stake of more than 25% in Crystal Amber.