Hurricane Energy plc said that the High Court had today refused to sanction its proposed restructuring plan.
RISK
The company added that its existing board was considering all options including an appeal.
“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.”
Hurricane noted that “a number of its shareholders” had indicated that they opposed the restructuring plan and intended to vote against the re-election of directors at the general meeting on 30 June.
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.
Investor Saba Capital Management has a stake of more than 25% in Crystal Amber.
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 and concluded on 23 June with judgment reserved and handed down today, 28 June.
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.