IOG plc has filed for administration following “extensive consideration” of its financial situation and the “underperformance” of its developed assets.
ISSUES
The company, which runs the Saturn Banks gas project in the southern North Sea, has also requested a suspension of trading in its ordinary shares on AIM from 2.10pm today.
IOG had been in talks over interest payments due on a €100 million bond with a deferred waiver date of 29 September.
It was also negotiating near-term liquidity and longer-term capital solutions with holders of its senior secured bond.
The company has faced problems with the Blythe H2 development well along with reported costs rising by May 2023 of up to £3m.
IOG added it would not be releasing its interim results for H1 2023.
RESTRUCTURING
In a statement, the company said that the board had “regrettably” concluded that the company should be placed into administration to preserve the value of the business for creditors.
“Accordingly, a notice has been filed with the court today notifying the company’s intention to appoint administrators of IOG plc as soon as reasonably practicable.
“In the context of the existing bond waiver which expires on 29 September 2023, discussions have been held with a representative group of senior secured bondholders and their advisors regarding a potential additional capital injection and associated restructuring of the company.
“Discussions are intended to continue during the administration with a view to a potential restructuring solution that protects the operating subsidiaries, which are not being placed into administration.”
Chair Esa Ikaheimonen added that the board was “extremely disappointed” after working “exhaustively” to overcome the company’s financial situation.
“We have not found a viable solution that would provide a return to shareholders. We regret the impact this outcome will have on our many stakeholders.
“I want to thank everyone involved, especially the IOG team, for their efforts through this very challenging period.”