London-based, Africa-focused Afren is entering into administration after failed refinancing and restructuring efforts.
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Image from Afren. |
The board appointed Simon Appell, Daniel Imison and Catherine Williamson of AlixPartners as administrators to take the reigns of the troubled company, which has been seen as an important step by secured creditors in preserving the value of Afren’s subsidiaries.
The administration decision is the result of timing and pricing assumptions, in addition to delays in project implementation during the same period that funding was being finalized.
An operational review of the company, completed earlier this month, led to the expectation of materially lower near-term production from its assets as compared to the production level assumed in the restructuring plan announced on 19 June 2015.
In addition, overall capacity of the assets to deliver field life production remains broadly unchanged, and near-term deferral of production revenues has undermined the immediate liquidity position of the business, Afren said in a statement.
“The board believes that all the possible routes have now been explored during the course of this process, which was subject to a strict timetable, driven by Afren short-term liquidity issues. These discussions have failed to deliver support for a revised refinancing and restructuring proposal that would result in Afren being able to pay its debts as they fall due,” Afren said.
No other company in the Afren Group has been appointed administrators or taken any other step to commence insolvency proceedings.
In mid June, Afren’s Group finance director Darra Comyn announced his resignation. At the same time, Afren appointed former Petroceltic International chief operating officer David Thomas as its new COO. Soon after, the restructuring plan was announced.
In April, former Roc Oil CEO Alan Linn was named the new CEO of Afren after the company fired CEO Osman Shahenshah and COO Shahid Ullah for “gross misconduct” after an independent investigation into unauthorized payments concluded, in October.
Afren holds interest in acreage offshore Nigeria, Ivory Coast, and Kenya, Seychelles, Tanzania, and South Africa.
Read more:
Former Roc chief heads for Afren top spot
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