Norwegian Oil Firm Noreco Proposes $252M Debt For Equity Conversion
OSLO, Feb 4 (Reuters) - The board of Norwegian oil firm Noreco has proposed converting only a part of its outstanding debt to equity after it was unable to get sufficient backing for an initial proposal made in December, the company said on Wednesday.
Noreco, which holds stakes in British, Norwegian and Danish fields, said in December it needed to fully convert its outstanding bond debt as it was burning through cash rapidly and cannot pay interest or service its debt.
"In the current proposal ..., the company will be converting approximate 1.9 billion crowns ($252 million) of bond debt to equity with approximate 1.2 billion crowns of bond debt remaining on amended terms, including amended maturities...," Noreco said in a statement.
The company said the revised proposal was made "in the light of severity of of the company's financial position" after an initial proposal failed to win sufficient support from bondholers.
The new proposal will require approval by qualified majorities of bondholders in the company's four bond loans and its shareholders.
"If approved, the proposed solution will be providing a financial platform that will allow Noreco to safeguard and optimise the company's assets in a challenging market environment," said Silje Augustson, Noreco's chairman of the board.
Following the proposed conversion the bondholders will own 92 percent of the company, it added.
Noreco also said it has revised its cash forecast for end-2015 before any bond payments to a positive result of 214 million crowns from a negative 12 million crowns due to cost-cutting measures.
Output from the company's biggest asset, E.ON's operated Huntington field in Britain, will remain restricted until the end of February, it said in January.
Brent crude prices fell by more than 60 percent since June, but jumped this week as some investors bet that a bottom had formed to the seven-month long rout.
($1 = 7.5491 Norwegian crowns)
(Reporting by Nerijus Adomaitis; Editing by Greg Mahlich and David Evans)
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