By Josh Beckerman 
 

Yuma Energy Inc. (YUMA), which said in May 2018 that it would explore strategic alternatives, said Red Mountain Capital Partners bought the company's senior secured bank debt and has signed a non-binding letter of intent for a potential restructuring agreement.

Red Mountain bought about $35 million of bank debt and related liabilities from Yuma's lending group, led by Societe Generale.

Yuma Energy shares rose 26% after hours to $2.31.

The oil and gas company said the move "is the first step toward strengthening our capital base, improving our liquidity and positioning the company to pursue growth opportunities."

The letter of intent calls for Red Mountain and Yuma to work toward a restructuring approved by Yuma's board by Sept. 30, and would include the exchange of senior secured debt for debt convertible into newly issued Yuma common stock.

 

Write to Josh Beckerman at josh.beckerman@wsj.com

 

(END) Dow Jones Newswires

September 10, 2019 19:02 ET (23:02 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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