(Bloomberg) – Tullow Oil Plc is in talks with its bondholders about refinancing a virtually $1.3 billion bond due subsequent yr, as the upcoming maturity provides to stress on the Africa-focused oil explorer.
Discussions have targeted on each the London-listed agency’s struggling efficiency and its refinancing choices, based on folks accustomed to the scenario who requested to not be named discussing a non-public matter.
A number of the firm’s bondholders have begun working with the regulation agency Weil, Gotshal & Manges LLP forward of extra formal discussions and potential amendments to the debt, among the folks stated.
Corporates would sometimes look to refinance bonds 12 to 18 months forward of their redemption, however weakening efficiency and excessive leverage have added to the challenges for Tullow.
Weil, Gotshal & Manges declined to remark. Tullow declined to touch upon bondholders working with Weil.
“We’re making good progress with plans to refinance and simplify the group’s capital construction throughout 2025,” a spokesperson for Tullow advised Bloomberg Information.
Tullow turned one of many UK’s hottest impartial oil explorers after making main African discoveries within the late 2000s. But it surely took on large money owed to develop them, and in recent times struggled to carry Kenyan fields onstream. This yr it agreed to promote the Kenyan deposits and offloaded property in Gabon because it seems to be to pay down debt.
See additionally: Tullow Oil finalizes phrases to promote Gabon property in $300 million deal
Such asset gross sales danger impacting manufacturing, with the agency warning that full-year output could droop, sending its shares to their lowest since 2020 earlier this month.
As of June 30, Tullow had $1.8 billion of drawn debt, of which about $1.3 billion was accounted for by its senior secured bond. The approaching maturity of that bond in Could subsequent yr has weighed on sentiment, with refinancing dangers highlighted by Moody’s Rankings and S&P International Rankings of their current downgrades of the agency.
With the maturity of Tullow’s bond now lower than 9 months away the money value at which the debt is quoted is all the way down to round 85 cents on the greenback, based on knowledge compiled by Bloomberg.
Tullow has raised $300 million by the sale of its Gabonese property. Tullow’s spokesperson additionally confirmed that the corporate expects to obtain $80 million from the sale of its property in Kenya to Gulf Vitality Ltd by the tip of the yr.
