Sequa Petroleum liquidates Norwegian business
After completing consultations with employee representatives, Tellus Petroleum, a part of Sequa Petroleum, has started its liquidation process.
Oil and gas company Sequa Petroleum started making plans in February to cease its E&P activities in Norway, conducted through its 100% owned Tellus Petroleum, to focus on acquiring assets elsewhere in Europe. The company then initiated consultation procedures with Tellus employee representatives.
Sequa informed on Friday that consultation procedures with Tellus Petroleum employee representatives have concluded and Tellus board and shareholder meetings have resolved to start the Tellus liquidation process in accordance with the Norwegian Companies Act.
The company said it expects this potential default, together with the potential default related to the outstanding 4Q 2016 $5.11 million bond coupon, to be resolved with the support of its main shareholder, Sapinda, as the company understands that the required majority of the bonds is held by Sapinda and affiliates who are supportive of restructuring the company’s debt.
While amounts received to date have not matched the timing or quantum requested, the company currently expects to be able to draw sufficient funds from its convertible loan facilities with Sapinda Invest Sarl and Sapinda Asia Limited to enable it to continue to trade and complete the liquidation of Tellus.
The net funds expected from the repatriation of liquidated assets together with debt restructuring and possibly new equity and/or debt funds will enable the company to progress selected high quality appropriately sized acquisition targets of production and development assets elsewhere that are value-accretive and provide cash flow.