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Afren gets new deadline for payment of $50m

By on April 8, 2015

United Kingdom-listed Afren has stated that it has obtained from the lenders of the $300 million Ebok debt facility a further deferral of the $50 million amortisation payment originally due on January 31, 2015 until April 30, 2015.
In an update on interim funding issued at the weekend, the company said it was making good progress on satisfying the relevant conditions precedent to the provision of the interim funding, adding that it expects to finalise arrangements for completion of the deal imminently.

As announced earlier last month, the company had entered into a conditional agreement with noteholders representing approximately 42 per cent of the outstanding principal amount due under its 2016 Notes, 2019 Notes and 2020 Notes for the provision of $200 million in net interim funding.

The interim funding will be in the form of super senior private placement notes ( PPNs) and the company had anticipated that the PPNs would be issued by the end of March 2015.

However, given the delay in completion of the interim funding, the company plans to release the Group’s 2014 full year results at the same time as the issue of the PPNs.

The company will also announce the appointment of a new CEO at the same time.

The company had secured, from its former Chief Executive Officer (CEO), Mr. Osman Shahenshah, and former Chief Operating Officer (COO), Mr. Shahid Ullah, a cash payment of $20.1 million to drop its planned legal proceedings against the dismissed officials.

The company also secured $17.1million in relation to payments made to the officials that were not authorised by the company, as first announced on July 31, 2014.

In addition to the $17.1 million, the company also secured a further S$3 million in respect of the costs to the company relating to independent reviews conducted by Willkie, Farr & Gallagher, KPMG and certain legal costs.

Shahenshah and Ullah also granted a non-competition covenant in favour of Afren.

The company entered in to settlement agreements with Shahenshah and Ullah which released them of claims relating to the unauthorised payments.

As a result of the settlement, the company agreed not to pursue legal proceedings against  Shahenshah and Ullah in connection with the claims relating to the unauthorised payments.

Shahenshah and three others, including the COO and two associate directors were dismissed over allegation of receipt of unauthorised payments.

The company, which is listed on the London Stock Exchange, had identified three unauthorised payments of $135.1 million on its balance sheet, including $93.3 million paid for an agreement for field extensions related to the Okoro field in Nigeria.

The officials were dismissed, following the outcome of an independent review carried out by Willkie Farr & Gallagher (UK) LLP (WFG) into the receipt of unauthorised payments by members of management and senior employees.

The decision to terminate the employment and directorships of Shahenshah and Ullah for gross misconduct was based on evidence identified by WFG of breaches by the two top officials of their obligations to Afren as employees and directors, in particular the receipt of unauthorised payments from third parties.
Wright and Virani were also found guilty of receiving payments in breach of the company’s approved remuneration policy.

While the board of the company had commenced an executive search for the replacement of the sacked senior executives, Egbert Imomoh remains Executive Chairman and Toby Hayward Interim-CEO.

 

[ThisDay]