#Afren: Recapitalisation, Trading statement and operations update @LSEplc

The money quote: 

 If shareholders do not approve the Recapitalisation, it is
expected that the amended economic terms of the New Senior Notes, and
the amendment and reinstatement of the Existing Notes, together with the
requirement to initiate a sale of the Group's business, will mean that
existing shareholders would be unlikely to see any return on their
current investment.

 Here are the details of the Recapitalisation Plan:

The Ad Hoc Committee, together with
lenders representing more than 67% by value of the lenders under the
Ebok Facility (the "Consenting Ebok Lenders") have also agreed in
principle to implement a financial and capital restructuring (the
"Recapitalisation") to secure the Group's future.  The key elements to
the Recapitalisation include:

·      Refinancing
of the PPN through the issuance of US$321 million new high yield notes
(the "New Senior Notes") which will provide an additional US$100 million
in net cash proceeds to the Group

·      Debt-for-equity swap: 25% of the 2016 Notes, 2019 Notes and 2020 Notes will be converted into equity with the remaining existing Notes being reinstated and extended to 2019 and 2020 at an annual coupon of 9.1%

·      Extension of the Ebok Facility until 2019, alongside a re-profiling of the amortisation schedule under such facility

·      Issue of new shares to the existing noteholders who subscribe for the PPN and the New Senior Notes

·      Up to
US$75 million equity offering to all shareholders to provide the
opportunity to participate in the Recapitalisation and provide
additional liquidity to the Group

It is anticipated that the
Recapitalisation will be completed by the end of June 2015.  The issue
of the PPN and implementation of the Recapitalisation are subject to
entry into and completion of further documentation and formal approval
by the Participating Noteholders, each of the lenders under the Ebok
Facility (the "Ebok Lenders"), the lenders under the Group's other
secured facilities and the Group's principal joint venture partners.  It
is intended that the Recapitalisation will be implemented pursuant to a
scheme of arrangement of the noteholders under the 2016 Notes, 2019 Notes and 2020 Notes (the "Noteholders").
In addition, an extraordinary general meeting of shareholders will be
called in due course to seek shareholder approval for the terms of the
Recapitalisation.   

The Recapitalisation will result in substantial dilution for existing shareholders.  Following
completion of the Recapitalisation and assuming that the equity
offering is subscribed in full by existing shareholders only, existing
shareholders will hold up to approximately 11% of the fully diluted
share capital of the Company. However, the
Company believes that there are significant benefits in shareholders
supporting the Recapitalisation, as compared to the alternative outcome
if shareholders do not vote in favour at the extraordinary general
meeting.  If shareholders do not approve the Recapitalisation, it is
expected that the amended economic terms of the New Senior Notes, and
the amendment and reinstatement of the Existing Notes, together with the
requirement to initiate a sale of the Group's business, will mean that
existing shareholders would be unlikely to see any return on their
current investment.

Read the whole press release here:  Trading statement and operations update - London Stock Exchange