TIDMGKP
RNS Number : 2492H
Gulf Keystone Petroleum Ltd.
12 March 2015
Not for release, publication or distribution, directly or
indirectly, in whole or in part in or into the United States or any
jurisdiction other than the United Kingdom and Bermuda where to do
so would constitute a contravention of the relevant laws or
regulations of such jurisdiction. This announcement (and the
information contained herein) does not contain or constitute an
offer to sell or the solicitation of an offer to purchase, nor
shall there be any sale of securities in any jurisdiction where
such offer, solicitation or sale would constitute a contravention
of the relevant laws or regulations of such jurisdiction.
12 March 2015
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone" or "the Company")
Notice of Meeting of Noteholders
US$250 million 13.0 per cent. Guaranteed Notes due 2017
(Regulation S Notes: ISIN XS1056559245 / Common Code
105655924;
Rule 144A Notes: ISIN XS1056559088 / Common Code: 105655908)
(the "Notes")
Gulf Keystone, the operator of the world class Shaikan field in
the Kurdistan Region of Iraq, today announces that it is inviting
the holders ("Noteholders") of its US$250 million 13.0 per cent.
guaranteed notes due 2017 to approve a proposal to make certain
amendments to the Trust Deed constituting the Notes and to the
Conditions contained therein.
Key Points
Ø As announced on 25 February 2015, Gulf Keystone has recently
engaged in discussions with a number of parties in relation to
possible asset transactions or a sale of the Company. Concurrently,
the Company is exploring a number of funding alternatives,
including an equity raise within the Company's authorised but
unissued share capital (collectively, the "Corporate Actions"). As
a result, the Company is seeking the removal of the Book Equity
Ratio ("BER") Put Option in order to strengthen the Company's
ability to negotiate with the interested parties regarding the
Corporate Actions.
Ø The Company expects the BER will be below 0.4 in its 2014
financial results primarily due to an expected impairment of the
Akri-Bijeel asset.
Ø The Company views the Akri-Bijeel Block as a non-core asset,
which has been held for sale. Its expected impairment is the result
of a technical accounting requirement under IFRS and is not as a
result of the Company's liquidity position.
Ø To the extent that the BER is below 0.4 for 60 days following
the date the Company releases its 2014 Annual Report and Accounts,
the Company will be required to make an offer to purchase the Notes
(the BER Put Option).
Ø The Company's current liquidity position was recently enhanced
by the US$26 million (gross) pre-payment for future Shaikan crude
oil export sales announced on 25 February 2015, with the Company's
cash balance as of the date of this announcement being US$90.4
million.
Ø Gulf Keystone is currently preparing to resume production from
the Shaikan field, which was suspended in mid-February, and crude
oil export deliveries by truck to the Turkish coast.
Ø The Company continues to work with the Kurdistan Regional
Government's Ministry of Natural Resources ("MNR") to establish a
regular payment cycle for past and future crude oil export sales
and payment of arrears and to finalise an early pipeline access
solution for the Shaikan crude.
Ø As stated on 25 February 2015, the Company intends to meet its
existing debt payment obligations.
Ø The Company has confidentially discussed the consent
solicitation with a number of significant Noteholders, and, based
on the Noteholders' responses during those discussions, expects
them to be supportive.
Commenting on today's announcement, Sami Zouari, Gulf Keystone's
CFO said:
"Our financing approach is to ensure that we are in a strong
position to be able to generate value for our stakeholders. As
such, and due to the expected impairment of the non-core
Akri-Bijeel Block, which has been held for sale by the Company, we
believe that it is appropriate to seek the removal of the Book
Equity Ratio Put Option in order to progress and complete a number
of strategic and funding options.
Concurrently, we are working with the MNR in order to establish
a regular payment cycle for past and future Shaikan crude oil
export sales, which we are currently preparing to resume."
Background
Further to the Company's announcement of 25 February 2015, Gulf
Keystone has recently engaged in discussions with a number of
parties in relation to possible asset transactions or a sale of the
Company. Concurrently, the Company is exploring a number of funding
alternatives, including an equity raise within the Company's
authorised but unissued share capital as approved at Gulf
Keystone's 2014 Annual General Meeting (collectively, the
"Corporate Actions"). These discussions are preliminary and, as
such, there can be no certainty that any offers will be received
and any transaction concluded, or any certainty as to the terms on
which any offer might be made or funding alternative consummated.
The Company is seeking the removal of the BER Put Option in the
Consent Solicitation (as defined below) in order to strengthen the
Company's ability to negotiate with the interested parties
regarding the Corporate Actions.
The Company expects that, primarily due to an expected
impairment of its Akri-Bijeel asset at the end of 2014, the BER of
the Company as at 31 December 2014 will be below 0.4 when it
reports its 2014 financial results. The Company views the
Akri-Bijeel Block as a non-core asset, which has been held for
sale. The expected impairment of the asset is the result of a
technical accounting requirement under IFRS and is not as a result
of the Company's liquidity position. The Book Equity Ratio is the
ratio of Book Equity to Total Assets and is an atypical covenant in
high yield debt instruments. To the extent that Book Equity Ratio
is below 0.4 for 60 days following the date the Company releases
its 2014 Annual Report and Accounts, which date is expected to be
at the end of April 2015, the Company will be required to make an
offer to purchase Notes at 101 per cent. plus accrued and unpaid
interest at around the end of September, pursuant to Condition 4.11
in the Terms and Conditions of the Notes contained in Schedule 4 of
the Trust Deed. The Company believes that the requirement to offer
to purchase the Notes could undermine its efforts around the
Corporate Actions and could deter third parties from engaging with
it in connection with the Corporate Actions. The Company is
requesting the removal of the Book Equity Ratio Put Option as: (a)
it relates primarily to a technical accounting requirement; (b)
removing it will provide greater operational flexibility; and (c)
removing it will allow us to optimally negotiate the Corporate
Actions.
The Company has confidentially discussed the Consent
Solicitation with a number of significant Noteholders, and, based
on the Noteholders' responses during those discussions, expects
them to be supportive.
Notice of Meeting of Noteholders
The Company is inviting the Noteholders to approve, by an
extraordinary resolution (the "Extraordinary Resolution"), a
proposal to make certain amendments (the "Proposed Amendments") to
the Trust Deed (as defined below) and the Terms and Conditions of
the Notes (the "Consent Solicitation").
A notice (the "Notice") convening a meeting of the Noteholders
to be held at 2.00 p.m. (London time) on 7 April 2015 (the
"Meeting") was delivered to Euroclear and Clearstream (each as
defined in the Notice) on 12 March 2015. The Meeting will be held
at the offices of Paul Hastings (Europe) LLP at Ten Bishops Square,
Eighth Floor, London E1 6EG, United Kingdom, for the purpose of
considering and, if thought fit, passing the Extraordinary
Resolution as set out in the Notice, which will be proposed as an
Extraordinary Resolution in accordance with the provisions of the
Trust Deed dated 17 April 2014 (as amended or supplemented from
time to time, the "Trust Deed") made between the Company, Gulf
Keystone Petroleum International Limited and BNY Mellon Corporate
Trustee Services Limited.
Consent Fees
The Company will make a cash payment of the "Early Consent Fee"
in an amount equal to US$5.00 for each US$1,000 in principal amount
of the Notes outstanding as at 1 April 2015 (the "Expiration Date")
and paid to Holders whose Consent is validly delivered prior to
5.00 p.m. London time, on 23 March 2015 (such date and time, as may
be extended, amended or earlier terminated, the "Early Consent
Time") and accepted pursuant to the terms of this Consent
Solicitation Memorandum. The "Late Consent Fee" shall be in an
amount equal to US$1.50 for each US$1,000 in principal amount of
the Notes outstanding as at the Expiration Date and paid to Holders
whose Consent is validly delivered prior to 5.00 p.m. (London time)
(the "Expiration Time") on the Expiration Date but after the Early
Consent Time and is accepted pursuant to the terms of this Consent
Solicitation Memorandum.
Subject to the terms and conditions specified in the Consent
Solicitation Memorandum, Noteholders who: (a) submit a valid
electronic voting instruction through the Clearing Systems in
favour of the Extraordinary Resolution by no later than the
Expiration Time on the Expiration Date and pursuant to which the
Registered Holder will appoint D.F. King Limited (the "Information
and Tabulation Agent") as proxy to vote in favour of the
Extraordinary Resolution at the Meeting; or (b) wish to appoint
someone else as their proxy to attend the Meeting and submit a
valid electronic voting instruction through the Clearing Systems
arranging for the appointment pursuant to the Trust Deed of such a
proxy to vote in favour of the Proposed Amendments at the Meeting
by no later than the Expiration Time on the Expiration Date (each
of (a) and (b), a form of "Consent"), and whose validly delivered
Consent is accepted pursuant to the terms of this Consent
Solicitation Memorandum, will be entitled to receive the Early
Consent Fee or the Late Consent
Fee, as applicable, if the Extraordinary Resolution is duly
passed at the Meeting and becomes effective in accordance with its
terms and the Supplemental Trust Deed is executed to effect the
Proposed Amendments. Holders who have submitted a Consent at or
prior to the Early Consent Time may not revoke such Consent after
the Early Consent Time, and Holders who have submitted a Consent
after the Early Consent Time may not revoke such Consent at any
time, in each case unless otherwise required by law or permitted by
the Clearing Systems or the Trust Deed.
Nothing in the Consent Solicitation or in the Consent
Solicitation Memorandum requires the Company to implement the
Extraordinary Resolution, even if it is approved. If the Company
withdraws or does not implement the Extraordinary Resolution for
any reason then no Early Consent Fees or Late Consent Fee will be
payable to any Noteholder.
Quorum and Required Votes
The quorum required for the Proposed Amendments to be considered
at the Meeting is one or more holders of the Notes or proxies
present in person representing 75 per cent. in principal amount of
the Notes outstanding.
To be passed at the Meeting, the Extraordinary Resolution
requires a majority of not less than 75 per cent. of the votes
cast. If passed, the Extraordinary Resolution shall be binding on
all the Noteholders, whether or not present at the Meeting, and
each of them shall be bound to give effect to it accordingly.
Expected Timeline
The following summary of key dates is qualified in its entirety
by the more detailed information appearing in the Consent
Solicitation Memorandum.
Holders of Notes should take note of the following dates in
connection with the Consent Solicitation. However, the dates below
are subject to modification in accordance with the terms of the
Consent Solicitation.
Date Calendar Date/Time Event
------------------------ ----------------------------- ----------------------------
Consent Solicitation 12 March 2015 Commencement of the
Launch Date Consent Solicitation.
Early Consent Time 5.00 p.m. London time The time prior to which
on 23 March 2015, unless Holders must validly
extended or earlier deliver a Consent to
terminated by the Company the Proposed Amendments
in its sole discretion. in order to qualify
for the Early Consent
Fee. Deadline for revoking
a Consent.
Expiration Time on 5.00 p.m. London time The time prior to which
Expiration Date on 1 April 2015. Holders must validly
deliver a Consent to
the Proposed Amendments
in order to qualify
for the Late Consent
Fee.
Meeting 2.00 p.m. London time The meeting of Holders
on 7 April 2015. to consider the Proposed
Amendments, as described
in the Notice.
Announcement of Consent As soon as practical The date on which the
Solicitation Results after the Meeting. result of the Consent
Solicitation is announced
by the Company.
Consent Fees Payment Promptly following The Proposed Amendments
Date the date on which the take effect upon execution
Supplemental Trust of the Supplemental
Deed is executed, subject Trust Deed. Promptly
to the terms and conditions thereafter, the Company
in the Consent Solicitation deposits the amount
Memorandum. necessary to pay the
Early Consent Fee to
Holders who validly
delivered Consents prior
to the Early Consent
Time and deposits the
amount necessary to
pay the Late Consent
Fee to Holders who validly
delivered Consents prior
to the Expiration Time,
with the Information
and Tabulation Agent.
The complete terms and conditions of the Consent Solicitation
are described in the Consent Solicitation Memorandum, copies of
which may be obtained by contacting D.F. King Limited, the
information and tabulation agent for the Consent Solicitation, as
set out below. Additional information concerning the Consent
Solicitation may be obtained by contacting the solicitation
agents.
Capitalised terms have the meanings assigned to them elsewhere
in this release, in the Consent Solicitation Memorandum or in the
Trust Deed, as applicable.
This press release is for informational purposes only, and the
Consent Solicitation is being made only pursuant to terms of the
Consent Solicitation Memorandum. The Consent Solicitation is not
being made to, and Consents are not being solicited from, holders
of Notes in any jurisdiction in which it is unlawful to make such
solicitation or grant such Consent. None of the Company, the
guarantor of the Notes, the solicitation agents, the information
and tabulation agent or the trustee under the Trust Deed makes any
recommendation as to whether or not holders of Notes should deliver
any Consents. Each holder of Notes must make its own decision as to
whether or not to deliver a Consent.
Further Information
A complete description of the terms and conditions of the
Consent Solicitation is set out in the Consent Solicitation
Memorandum. Further details about the transaction can be obtained
from:
The Solicitation Agents
Deutsche Bank AG, London Branch
Reid Payne
Tel : +442075476153
Email: reid.payne@db.com
Gayatri Narayan
Tel : +442075473693
Email: gayatri.narayan@db.com
Perella Weinberg Partners UK LLP
Tanguy Riviere
Tel: +44 20 7268 2874
Email: triviere@pwpartners.com
Yue Zhou
Tel: +44 20 7268 2844
Email: yzhou@pwpartners.com
Requests for assistance in completing and delivering the
electronic voting instructions or requests for copies of the
Consent Solicitation Memorandum and other related documents should
be directed to the Information and Tabulation Agent:
Information and Tabulation Agent
D.F. King Limited
85 Gresham Street
London EC2V 7NQ
United Kingdom
Tel: +44-20-7920-9700
Email: gkp@dfkingltd.com
Enquiries:
Gulf Keystone Petroleum: +44 (0) 20 7514 1400
Anastasia Vvedenskaya, Head of Investor
Relations
Media Relations and Financial PR Adviser: +44 (0)20 7520 9266
Mark Antelme
or visit: www.gulfkeystone.com
Notes to Editors:
-- Gulf Keystone Petroleum Ltd. (LSE: GKP) is an independent oil
and gas exploration, development and production company focused on
the Kurdistan Region of Iraq.
-- Gulf Keystone Petroleum International (GKPI) holds Production
Sharing Contracts for four exploration blocks in Kurdistan, the
Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.
-- GKPI is the operator of the Shaikan Block, which is a major
commercial discovery, with a working interest of 75% and is
partnered with MOL Kalegran Limited (a 100% subsidiary of MOL
Hungarian Oil and Gas plc.) and Texas Keystone Inc., which have
working interests of 20% and 5% respectively. Texas Keystone Inc.
holds its interest in trust for Gulf Keystone, pending transfer of
its interest to the Company.
-- Gulf Keystone is moving into the large-scale phased
development of the Shaikan field targeting 100,000 bopd of
production capacity during Phase 1 of the Shaikan Field Development
Plan following its approval in June 2013.
Disclaimer
This announcement contains certain forward-looking statements.
These statements are made by the Company's Directors in good faith
based on the information available to them up to the time of their
approval of this announcement but such statements should be treated
with caution due to inherent uncertainties, including both economic
and business factors, underlying such forward-looking information.
This announcement has been prepared solely to provide additional
information to shareholders to assess the Group's strategies and
the potential for those strategies to succeed. This announcement
should not be relied on by any other party or for any other
purpose.
This communication and the information contained herein is not
an offer of securities for sale in the United States. Securities
may not be offered or sold in the United States unless they are
registered or are exempt from registration. Any public offering of
securities to be made in the United States would be made by means
of a prospectus that would contain detailed information about the
company and its management, as well as financial statements. The
company does not intend to register any portion of this offering in
the United States or to conduct a public offering in the United
States or any other jurisdiction. Any public offering of securities
to be made in the United States would be made by means of a
prospectus that would contain detailed information about the
Company and its management, as well as financial statements. Copies
of this communication are not being, and should not be, distributed
in or sent into the United States.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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