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Afren PLC (AFR)

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Friday 19 June, 2015

Afren PLC

Proposed Debt Restructuring and Refinancing

RNS Number : 7539Q
Afren PLC
19 June 2015
 

THIS ANNOUNCEMENT IS NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS MUST ONLY SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT ON THE BASIS OF THE INFORMATION CONTAINED IN A PROSPECTUS AND NOT IN RELIANCE ON ANY INFORMATION IN THIS ANNOUNCEMENT.

 

 

 

Launch of the Proposed Debt Restructuring and Refinancing

 

London, 19 June 2015

Afren plc ("Afren", the "Company" or the "Group"), (LSE: AFR) today announces the publication of a prospectus and circular to shareholders relating to its proposed Restructuring, including the Open Offer to shareholders, the receipt of an additional US$148 million in net cash proceeds and the proposed restructuring of the Company's outstanding Notes.  The Directors believe that the Restructuring is in the best interests of the Company and for the benefit of all stakeholders.

Commenting today, Egbert Imomoh, Chairman of Afren plc, said:

"Afren Shareholders have been through an incredibly difficult period in the life of the business, and the next steps, whilst complex, are essential if we want to successfully emerge from this period on a value growth trajectory. I am clear that the only viable course of action for the business is to progress through the proposed refinancing process; it offers the only secure route to relieve the unsustainable debt burden, and support Afren's recovery. "

Commenting today, Alan Linn, CEO of Afren plc, said:

"I believe Afren has significant potential within its core Nigerian portfolio which will enable us to successfully emerge from this period and provide growth to all shareholders. The recommended restructuring, combined with the open offer, is the only viable opportunity for our shareholders to realise any value from their investment in the company.  I urge all Afren shareholders to recognise this fact and vote to retain their active interest in the company by voting in favour of the proposed debt restructuring and refinancing."

 

SHAREHOLDERS SHOULD VOTE IN FAVOUR OF THE RESTRUCTURING

In the opinion of the Directors, voting for the Resolution and authorising the implementation of the Restructuring will:

·           Provide Existing Shareholders the only opportunity to realise value and participate in the recovery of the Group

·           Provide Existing Shareholders an opportunity to participate in the Open Offer to increase their ownership position on favourable terms

·           Improve the capital structure of the Group to provide it the time to implement its business plan and grow the value of its assets

·           Prevent a formal insolvency filing

If Shareholders do not approve the Resolution at the General Meeting, Existing Shareholders have no prospect of any value.  Upon a No vote:

·           The restructuring will still proceed without delay

·           The amount of debt will increase by approximately US$266 million immediately as compared to a Yes vote and the interest rates on the Group's new debt will cause outstanding debt to increase significantly.  There is no value for shareholders unless and until all of this debt is repaid

·           Holders of the New Senior Notes will have security over all of the Group's operating subsidiaries

·           The Company will be required to have entered into an agreement by no later than 31 December 2016 to sell all of its assets. These assets can be sold to any party, including the Noteholders, and can be completed with or without shareholder approval.

The Directors consider that if Shareholders do not approve the Resolution at the General Meeting, the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment.

In the Board's opinion, the Restructuring, including the Open Offer is in the best interests of Afren and the Shareholders taken as a whole.  Accordingly, the Afren Board unanimously and strongly recommends Shareholders to vote in favour of the Resolution to be proposed at the General Meeting, as all Directors have irrevocably undertaken to do in respect of their own beneficial holdings of Existing Shares, amounting to 6,640,839 Existing Shares and 0.6% of the total number of votes available to be cast at the General Meeting.

Terms of the Restructuring

The principal components of the Restructuring comprise:

·        the implementation of a scheme of arrangement in respect of the Existing Notes, including:

o   the issue of approximately US$369 million of new high yield notes due 2017 to refinance and repay the Bridge Securities and to provide an additional US$148 million in net cash proceeds to the Group;

o   the conversion of approximately US$234 million of the Existing Notes (representing 25% of the 2016 Notes, the 2019 Notes and the 2020 Notes) into new Ordinary Shares in the Company, representing 80% of the existing issued share capital; and

o   the remainder of the Existing Notes to be cancelled and reissued in equal amounts of approximately US$350 million each of new notes due December 2019 and December 2020 respectively, with an annual interest rate of 9.1%;

·           the issue of additional new Ordinary Shares, equal to 50% of the issued share capital of the Company following the Debt for Equity Swap described above, to holders of the New Senior Notes;

·           the issue of up to £49.2 million (approximately US$75 million) of new Ordinary Shares by way of an open offer to Shareholders at 1 pence per Open Offer Share;

·           the issue of new Ordinary Shares, equal to 10% of the fully diluted share capital of the Company following the completion of the Open Offer, to holders of the New Senior Notes in order of priority of their agreement to subscribe for the New Senior Notes;

·           the issue of new Ordinary Shares, equal to 5% of the fully diluted share capital of the Company following the completion of the Open Offer, to the holders of the Bridge Securities in partial repayment of the Bridge Securities;

·           the entry into an amended term facility with the Ebok Lenders, including to extend the period for repayment of the US$300 million Ebok Facility until June 2019; and

·           the entry into an amended loan agreement with the Okwok/OML 113 Lender, including to extend the period for repayment of the US$50 million Okwok/OML 113 Facility until June 2019.

These summary highlights should be read in conjunction with the further details of the Restructuring, which are set out below.

The Restructuring will be implemented by means of a scheme of arrangement of the Existing Notes under the Companies Act 2006.  The terms of the Restructuring, but not its implementation, are also subject to the approval of Shareholders in general meeting.

Information on the proposed refinancing is available at www.afrenegmvote.com 

For further information contact:

 

Afren plc

Alan Linn, Chief Executive Officer

Natalia Erikssen, Investor Relations

 

Bell Pottinger (public relations adviser to Afren plc)

Gavin Davis

Henry Lerwill

 

 

Highlights of the Restructuring

The Restructuring will provide holders of the Existing Shares with the opportunity to participate further in any potential upside arising from any increase in oil prices and the Group's exploration and appraisal portfolio.

The principal components of the Restructuring comprise the following:

·           The issue of the New Senior Notes, the Debt for Equity Swap, the New Senior Notes Share Issue and the issue of the New 2019 and New 2020 Notes will be made by way of a scheme of arrangement between the Group and the Existing Noteholders in accordance with Part 26 of the Companies Act (the "Scheme").

·           As part of the Scheme, Afren Finance plc (a newly incorporated direct subsidiary of the Company (the "Notes Issuer")) will issue approximately US$369 million of new high yield notes due August 2017 ("New Senior Notes") to refinance and repay substantially all of the Bridge Securities and provide an additional US$148 million in net cash proceeds to the Group.  The issue of the New Senior Notes has been fully subscribed by the Bridge Noteholders, while all Existing Noteholders will be eligible to participate in the subscription for the New Senior Notes pro rata to their existing holdings (by way of claw back of the initial subscription by the Bridge Noteholders).  The New Senior Notes will carry an annual interest rate of 15% (7.5% payable in cash and 7.5% payable in kind).

·           As part of the Scheme, 25% of the face value of the outstanding principal amount (and accrued interest) of the Existing Notes (being approximately US$234 million) will be released and converted into equity pursuant to the issue of new Ordinary Shares to Existing Noteholders, which will result in Existing Noteholders holding 80% of the increased share capital of the Company immediately following such conversion (the "Debt for Equity Swap").

·           As part of the Scheme, the remainder of the Existing Notes will be cancelled and reissued into two equal amounts of approximately US$350 million of new notes due 2019 and 2020 respectively to be issued by the Notes Issuer (the "New 2019 Notes" and the "New 2020 Notes", respectively).  The New 2019 Notes and the New 2020 Notes will have an annual interest rate of 9.1%, payable in kind until the New Senior Notes are fully repaid and then payable in cash.

·           As part of the Scheme, immediately following the implementation of the Scheme, the Company shall issue new Ordinary Shares for cash at nominal value to those Existing Noteholders who subscribe for New Senior Notes.   The Company has agreed to issue a total aggregate amount of new Ordinary Shares representing 50% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap (the "New Senior Notes Share Issue").

·           The Company will subsequently commence a pre-emptive open offer (the "Open Offer") to all Shareholders, including those Existing Noteholders who acquire shares pursuant to the Debt for Equity Swap and the New Senior Notes Share Issue.  The Open Offer will comprise up to £49.2 million in new Ordinary Shares offered on the basis of 4 new ordinary shares for each 9 ordinary shares held on the relevant record date.  Shareholders will have the ability to subscribe for more than their pro rata interest pursuant to an excess application facility, however applications from Existing Shareholders for additional shares will be limited so that Existing Shareholders will be limited in aggregate to a maximum holding of 15% of the issued share capital immediately following the completion of the Restructuring.

·           Upon completion of the Open Offer, as part of the Scheme the Company has agreed to issue for cash at nominal value to certain of the Existing Noteholders who subscribed for New Senior Notes additional new Ordinary Shares representing 10% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Bridge Securities Share Issue (the "Early Subscriber Issue").  Such additional Ordinary Shares will be allocated to Noteholders who subscribed for New Senior Notes, as an "early bird" incentive payment, in the order of priority of their agreement to subscribe for New Senior Notes. 

·           If the New Senior Notes are issued after 7 August 2015, the amount of the Early Subscriber Issue will increase by 0.1205% of the fully diluted share capital of the Company for each day from 8 August 2015 until the date of issue of the New Senior Notes (the "Additional Commitment Issue").  This is intended as a form of commitment fee for Existing Noteholders agreeing to subscribe early to the issue of the New Senior Notes. 

·           US$5 million of the Bridge Securities will not be repaid by the New Senior Notes, but will instead be released and converted into equity pursuant to the issue of new Ordinary Shares to Bridge Noteholders (or their nominees), in an aggregate amount representing 5% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Early Subscriber Issue (the "Bridge Securities Share Issue").

·           Afren will enter into an amendment agreement with the Ebok Lenders in respect of the Ebok Facility (the "Amended Ebok Facility"), pursuant to which, amongst other things, the period for repayment of the US$300 million Ebok Facility will be extended until 30 June 2019.  These amendments will come into effect only if the Restructuring is completed.

·           Afren has entered into an amendment agreement with Access Bank in respect of the Okwok/OML 113 Facility (the "Amended Okwok/OML 113 Facility"), pursuant to which the period for repayment of the US$50 million Okwok/OML 113 Facility will be extended until June 2018.

·           Afren will enter into a global intercreditor agreement (the "Global Intercreditor Agreement") which will replace certain existing intercreditor agreements and pursuant to which, amongst other things, with respect to the Ebok Collateral, the New Senior Notes will rank ahead of the Amended Ebok Facility and the Amended Ebok Facility will rank ahead of the Existing Notes. The Global Intercreditor Agreement will come into effect only if the Restructuring is completed.

·           Prior to the implementation of the Scheme, the Group will undertake an internal reorganisation and the Notes Issuer will become an intermediate holding company of the Group.  The Notes Issuer (together with an affiliate of the Notes Issuer) will subsequently hold all of the Company's investments in its operating subsidiaries and will also acquire all (or substantially all) of the Company's assets (the "Security Reorganisation").  The Company has also agreed to grant security over its interests in the Notes Issuer's shares in favour of the New Senior Notes Trustee (for the benefit of, among others, the holders of the New Senior Notes). 

Details of the Open Offer

The Company proposes to raise up to £49.2 million (approximately US$75 million) by way of Open Offer subject to, inter alia, the passing by Shareholders of the Resolution at the General Meeting, by the issue of up to 4,922,491,218 new Ordinary Shares. The Offer Price of 1 pence per Ordinary Share, which is payable in full on acceptance, represents a 46.5% discount to the closing middle market price of an Existing Share on 18 June 2015 (being the last business day before the announcement by Afren of the terms of the Open Offer) and a 26.3% discount to the theoretical ex-right price of an Existing Share based on that closing price.

The Open Offer is open to all Shareholders, including those Existing Noteholders who acquire Ordinary Shares pursuant to the Debt for Equity Swap and the New Senior Notes Share Issue.

Under the Open Offer, Qualifying Shareholders may apply for Open Offer Shares at the Offer Price, payable in full on application, free of all expenses, up to a maximum of their pro-rata entitlement, which shall be calculated on the basis of:

4 Open Offer Shares for every 9 Existing Shares

held by them and registered in their names at 5.00 p.m. on the Record Date and so in proportion for any other number of Existing Shares then heldand otherwise on the terms and conditions set out in the Prospectus and, in the case of Qualifying non-CREST Shareholders, the Application Form

Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer. Fractional entitlements to Ordinary Shares will not be allotted to Qualifying Shareholders and, where necessary, entitlements will be rounded down to the nearest whole number of Ordinary Shares. Ordinary Shares representing fractional entitlements will not be allotted to Qualifying Shareholders but will be aggregated.  Accordingly, Qualifying Shareholders with fewer than three Existing Shares will not be entitled to any Open Offer Shares.

The Open Offer will include an excess application facility, which will allow Qualifying Shareholders to subscribe for additional Open Offer Shares.  The maximum number of Shares available under the excess application facility will be up to the full number of Open Offer Shares, but applications from Existing Shareholders will be limited to so that the maximum number of Open Offer Shares issued in total under the Open Offer to Existing Shareholders is capped at 984,498,244 Open Offer Shares.  This is to ensure that Existing Shareholders will hold up to a maximum of 15% of the total issued share capital of the Company following the Restructuring.  If applications for additional Open Offer Shares under the excess application facility exceed the aggregate number of Excess Application Shares, subscriptions will be scaled back at the discretion of the Company, such that the Company intends to allocate on a priority basis applications received from Shareholders who hold shares prior to the implementation of the Scheme.

The Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to all future dividends and other distributions declared, made or paid.

The Open Offer is conditional, amongst other things, upon:

(a)   the passing of the Resolution (without amendment) at the General Meeting;

(b)   the Scheme having become effective in accordance with its terms; and

(c)   Admission becoming effective by not later than 8.00 a.m. on 24 August 2015 (or such later time and/or date as Afren and the sponsor may agree, being not later than 8.00 a.m. on 7 September 2015).

Applications will be made to the FCA for the new Open Offer Shares to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for the new Open Offer Shares to be admitted to trading on the main market for listed securities.  It is expected that Admission will become effective and dealings (for normal settlement) in the Open Offer Shares will commence at 8.00 a.m. on 24 August 2015.

The Open Offer is not underwritten.

Conditionality of the Restructuring

The implementation of the Restructuring is conditional upon, inter alia, approval of a special resolution to be put to Shareholders in general meeting (which is necessary to approve the allotment and issue of the Open Offer and the issue of shares in connection with the Restructuring).  If Shareholders do not vote in favour of the Resolution, but the other conditions to the implementation of the Restructuring are satisfied or waived, the Restructuring will still be implemented, but on adjusted terms (the "Alternative Restructuring"). 

In addition to obtaining Shareholder approval for the passing of the Resolution, the Restructuring will require the Amended Ebok Facility and the Amended Okwok/OML 113 Facility to have been executed, as well as the completion of the Security Reorganisation.  The Scheme will require the consent of not less 75% of holders (by value) and a majority in number of the 2016 Notes, 2019 Notes and 2020 Notes that attend and vote at the Scheme meeting. The Scheme will also require the sanction of the English High Court and approval by the Delaware court of a Chapter 15 reconstruction.  Currently, holders of Existing Notes representing approximately 54.6% in aggregate of the 2016 Notes, the 2019 Notes and the 2020 Notes have contractually undertaken to vote in favour of the relevant resolutions at the Scheme meeting.

Even if Shareholders approve the Resolution, if the remaining conditions to the Restructuring are not satisfied (or where possible waived) no form of restructuring will be implemented.  In such circumstances, the Directors believe that the Group would face an immediate risk of being unable to meet its contractual obligations when they fall due.  This is because the Directors believe that the Group's lenders would be highly likely to accelerate the Group's borrowings given the existing events of default under the Group's facilities and other borrowings and the failure of the Group to complete a consensual restructuring.   As a result the Company would cease trading and the subsidiaries of the Company would become subject to applicable insolvency processes and the Directors believe that there would be no prospect that Shareholders would receive any proceeds from the sale of the Group's assets or other return of income or capital by the Company.

Importance of the vote and consequences of a failure to approve the Restructuring

If Shareholders do not approve the Resolution at the General Meeting, but the other conditions to the Restructuring are satisfied (including the approval of the Scheme by the Existing Noteholders at the Scheme Meeting), the Restructuring will still be implemented, but on the terms of the Alternative Restructuring. 

Shareholders should therefore be aware that they cannot prevent the implementation of the Restructuring by voting "no" at the General Meeting.

If the Alternative Restructuring is implemented, the Directors believe that there would be no prospect that Shareholders would receive any proceeds from the sale of the Group or the disposal of the Group's assets or other return of income or capital by the Company. 

Following a No vote, under the Alternative Restructuring:

·      The cost and amount of the Group's debt will increase significantly

Total debt of US$1,525 million will rank ahead of shareholders in right of payment. 

As compared to the terms of the Restructuring, the amount owing to holders of the New Senior Notes will increase by US$266 million immediately and by a further US$371 million over the next two years due to higher interest payable on such notes.

·      The holders of the New Senior Notes will have security over all of Afren's operating subsidiaries

The holders of the New Senior Notes will have share pledge security over the Notes Issuer and the operating subsidiaries.  This security was granted as a condition of the new funding; without this, the Company would not have received the proceeds of the Bridge Securities or the additional funding under the New Senior Notes and it would have been very unlikely to have avoided insolvency proceedings. 

An internal reorganisation is being undertaken with the insertion of a new intermediate holding company (Afren Finance plc, being the issuer of the New Senior Notes, New 2019 Notes, New 2020 Notes and New 2021 Notes), which  will result in the Company no longer directly holding shares in its operating subsidiaries.  Afren's only material asset will be its investment in the Notes Issuer and Afren International Limited (another holding company for the Nigerian operating subsidiaries).

·      The Company will be required to have entered into an agreement by no later than 31 December 2016 to sell all of its assets

In order to avoiding triggering an event of default, the Company will need to complete certain actions as part of this sale process by 31 December 2015 and enter into binding agreements for such sale by 31 December 2016.

There will therefore be a limited time for shareholders to recover value as the sale proceeds will need to be in excess of the amount of the Group's debt.

·      Holders of the New Senior Notes will have effective control over the sale of the Group's assets

The holders of the New Senior Notes will be entitled to appoint a majority of the board of Directors and therefore they will have effective control of the sale process.  The Group's assets may be sold to any party, including the Noteholders. 

Shareholders will only receive value if any sales proceeds of the Group's assets are in excess of the amount of the debt.

·      Holders of the New Senior Notes will be able to enforce their security on any default without requiring shareholder approval

Importantly, while any sale will be subject to Shareholder approval as required by the Listing Rules, it is an event of default under the New Senior Notes if shareholders do not approve a sale when required. 

Accordingly, upon any event of default, including due to failure of shareholders to approve the sale, the holders of the New Senior Notes will be able to enforce their security without further shareholder approval. 

Details of the amendments to the terms of the Restructuring that will be implemented under the Alternative Restructuring are set out in Appendix I to this announcement.

If Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of new Ordinary Shares in connection with the Restructuring, the economic terms of the Alternative Restructuring (being the terms of the Alternative New Senior Notes, the obligation to pay US$934 million in principal (and interest) under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes), together with the requirement to initiate a sale of the Group's business, will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment. 

Dilution

The Restructuring will result in substantial dilution for Existing Shareholders in their interests in the Company.  Following the implementation of the Restructuring (and assuming that the Open Offer is subscribed in full by all qualifying shareholders), the Existing Shareholders, in aggregate, will own up to approximately 9% of the share capital in the Company, and the holders of the Existing Notes, in aggregate, will own approximately 91% of the share capital in the Company.  
This level assumes that the holders of the Ordinary Shares issued pursuant to the Debt for Equity Swap shares and the New Senior Notes Share Issue take up their Open Offer Entitlements in full.  However, the members of the Ad Hoc Committee have indicated that they do not intend to participate in the Open Offer, which would allow their basic entitlements to be available to satisfy applications under the excess application facility and reduce this level of dilution.
If only Existing Shareholders subscribe under the Open Offer, including taking up in full their entitlements under the excess application facility, Existing Shareholders will now be able to hold up to 15% of the share capital in the Company following the completion of the Restructuring.  This shareholding level for Existing Shareholders has been increased from 11% as announced on 13 March 2015 when the Restructuring was initially agreed in principle.

The following table shows the dilution to the issued share capital for each stage of the Restructuring and the cumulative dilution effect for Existing Shareholders.

Step

Dilution to issued share capital

Cumulative Interests of Existing Shareholders

Current position

-

100%

Debt for Equity Swap

80%

20%

New Senior Notes Share Issue

50%

10%

Open Offer

-

17%(1)

Bridge Securities Share Issue

5%

16% (1)

Early Subscriber Issue

10%

15% (1)(2)

Completion of Restructuring

-

15% (1)(2)

(1) Assumes that Existing Shareholders subscribe for their Open Offer Entitlements in full and no holder of Existing Notes subscribes for any Open Offer Shares.

(2) Assumes that the New Senior Notes are issued on or before 7 August 2015 so that the Additional Commitment Issue does not become payable.

Additionally, if the New Senior Notes are issued after 7 August 2015, the Additional Commitment Issue will become payable and the amount of the Early Subscriber Issue will increase by 0.1205% of the fully diluted share capital of the Company for each day from 8 August 2015 until the date of issue of the New Senior Notes.  It should be noted that this deadline has been extended from the original date of 22 July 2015 announced in March 2015.  If the Restructuring proceeds on the timetable outlined in the Prospectus, this Additional Commitment Issue would not become payable. 

The total number of Ordinary Shares in issue immediately prior to the Restructuring will represent between approximately 6% and 9% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring (depending upon the level of take up in the Open Offer). The new equity being injected will therefore be represented by between approximately 91% and 94% of the total number of Ordinary Shares in issue immediately following completion of the Restructuring, but before the implementation of the share consolidation.

If the Shareholders decide to not take up some or all of their Open Offer Entitlements, the proportion of Afren they will own will be significantly smaller once the Restructuring has been completed, as Ordinary Shares are being issued for the purposes of the Restructuring.  In these circumstances the Shareholders' interest in Afren will be diluted further and the maximum dilution they would suffer immediately following completion of the Restructuring in the event that they do not take up any of their Open Offer Entitlements would be 94%.

Financial Effects of the Restructuring

The Directors cannot give any assurance (even if the Restructuring is successfully completed) that the Group's business will be successful in the future.  Even if the Restructuring does proceed, the ability of the Group to be in a position to return value to Shareholders (either through an increased share price or payment of dividends or a return of capital in the longer term) for their investment is highly dependent on the ability of the Group to restructure its operations in order to reduce its cost base, through headcount reductions, renegotiating pricing and terms with suppliers to reflect the current lower oil price environment, and also developing and monetising its reserves. The Group anticipates that its operating expenses will benefit from a targeted 15% in efficiency savings through a reduction in market rates and renegotiating contracts with suppliers. The Group will also need to successfully drive operational improvements, in particular improving recovery rates and increasing production.

The Group will be dependent on the prevailing market oil price, even though the cost reductions and operational improvements described above should allow the business to be more sustainable in a lower oil price environment compared to the last quarter of 2014. The Group's aim is to ensure that its business is in a strong position to sustain operations at current oil price levels, although it will take time to implement the operational restructuring and see the benefits of such changes.  If oil price levels return to or even fall below levels seen in early 2015, the Company will need to review ongoing capital expenditures and operational costs.  Additionally, while the Group's 2015 Business Plan focuses on capital investment in producing assets, all discretionary spending on exploration projects has been put on hold beyond 2015.

If the crude oil price remains at or near its current level, production remains static or decreases, cost reductions and operational improvements are not successfully implemented, appraisal assets are not developed and/or if no new discoveries are made and monetised, it is likely that no dividends would be declared, made or paid and that Afren would be unable otherwise to return any value to its Shareholders. The decrease in crude oil prices in the second half of 2014 has impacted the Group's revenue, and has and may continue to reduce the amount of cash flow available to fund the Group's operations and certain capital expenditure projects, which in turn would reduce production volume and exacerbate the decrease in revenue.  If prices for the Group's crude oil fall further or remain at lower levels, this would materially adversely affect the Group's business, results of operations, financial condition and prospects, and the trading price of the Ordinary Shares.

Currently, the Group's outstanding aggregate debt under such indebtedness is approximately US$1,789 million, and interest on such debt continues to accrue.  Immediately following the completion of the Restructuring, the Group will have aggregate borrowings from financial institutions of approximately US$1,525 million.  This will comprise the following:

·           the Notes Issuer will have indebtedness of approximately US$700 million pursuant to the New 2019 Notes and the New 2020 Notes;

·           the Notes Issuer will have indebtedness of approximately US$369 million pursuant to the New Senior Notes due for repayment by August 2017; and

·           the Group will have indebtedness of approximately US$454 million pursuant to the Amended Ebok Facility, the Amended Okwok/OML 113 Facility and the OML 26 Facility.

The Group will also have certain other debt for borrowed money under agreements with its bank lenders.

Use of proceeds of the Restructuring

Assuming the Open Offer is subscribed in full, the Open Offer proceeds of £49.2 million (before expenses) will be applied by Afren as follows:

·           50% of the gross proceeds will be used to make payments for a pro rata reduction in the principal amount outstanding under the Ebok Facility and Okwok/OML 113 Facility; and

·           the balance of the gross proceeds for general working capital purposes.

Any repayment of existing indebtedness under the Ebok Facility and the Okwok/OML 113 Facility out of the proceeds of the Open Offer is in addition to, and not in replacement of, the amended amortisation payments schedule.  Only to the extent the Company receives proceeds from the Open Offer will it be required to make the payments under the Ebok Facility and Okwok/OML 113 Facility described above. 

However, as the Open Offer is not underwritten, there is no assurance that the Company will receive any proceeds under the Open Offer. The Company can implement the Restructuring (provided the Resolution is passed) or the Alternative Restructuring (if Resolution is not passed) and continue as a going concern even if it does not receive any proceeds from the Open Offer.

In addition to any proceeds received under the Open Offer, the Company expects to use the net proceeds of the issue of the New Senior Notes (being US$148 million before expenses) for general working capital purposes, including capital expenditure for its core producing assets in Nigeria.  The Company will also receive the nominal value of the Ordinary Shares comprised in the New Senior Notes Share Issue and Early Subscriber Issue, which will amount to less than £1,500.   The Company estimates the expenses of the Restructuring will be approximately US$63 million, which it intends to pay with any proceeds of the Open Offer, as well as the net proceeds of the issue of the New Senior Notes and existing cash balances.

The Company has approached the Ad Hoc Committee with a view to increasing the amount borrowed under the Bridge Securities by an additional US$30 million in net cash proceeds to provide additional working capital.  Any additional borrowing under the Bridge Securities will be repaid out of the proceeds of the New Senior Notes.  The Ad Hoc Committee is currently considering such request and there can be no assurance that such funding will be made available.

Expected timetable

Afren will shortly issue a combined circular and prospectus to Shareholders, setting out the details of the Restructuring and convening a general meeting of the Company, which is expected to be held at 11.00 a.m. on 24 July 2015 at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW, at which the Resolution will be put to Shareholders.

The Company is targeting the implementation of the scheme of arrangement at the beginning of August and the completion of the Restructuring before the end of August 2015. 

 

Event

Time and Date 2015

Announcement of the Restructuring and Open Offer

13 March

Publication of Prospectus

19 June

Annual General Meeting

11.00 a.m. on 25 June

Latest time and date for receipt of Forms of Proxy or submission of proxy votes electronically

11.00 a.m. on 22 July

General Meeting

11.00 a.m. on 24 July

Determination as to whether the Restructuring or Alternative Restructuring applies and the Open Offer will proceed

 24 July

Effective Date of the Scheme

5 August

Record Date for entitlements under the Open Offer

5.00 p.m. on 6 August

Ex entitlement Date for the Open Offer

8.00 a.m. on 7 August

Open Offer Entitlements and Excess Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders

10 August

Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST

4.30 p.m. on 17 August

Latest recommended time and date for depositing Open Offer Entitlements and Excess Open Offer Entitlements into CREST

3.00 p.m. on 18 August

Latest time and date for splitting Application Forms (to satisfy bona fide market claims)

3.00 p.m. on 19  August

Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)

11.00 a.m. on 21 August

Results of the Open Offer announced through an RIS

7.00 a.m. on 24 August

Admission and commencement of dealings in the Ordinary Shares expected to commence

8.00 a.m. on 24 August

CREST stock accounts expected to be credited for the Ordinary Shares as soon as practicable after

8.00 a.m. on 24 August

Share certificates for Ordinary Shares expected to be despatched

By 7 September

 

Notes:

(1)   Each of the times and dates in the above timetable, and mentioned elsewhere in this document, is subject to change, in which event details of the new times and/or dates will be notified to the FCA and the London Stock Exchange and, where appropriate, Qualifying Shareholders.  Please note that any Existing Shares sold prior to close of business on 7 August 2015, the last date on which the Existing Shares trade with entitlement, will be sold to the purchaser with the right to receive Open Offer Entitlements.

(2)   All references to time in this document relate to London time.

 

SCHEME TIMETABLE

2015

Explanatory Statement sent to Existing Noteholders

30 June

General Meeting to approve the Resolution

24 July

Determination as to whether the Restructuring or Alternative Restructuring applies

24 July

Creditors' meeting to vote on the Scheme

29 July

Sanction Hearing (UK)

30 July

Chapter 15 Hearing (US)

31 July

Issue of New Senior Notes and repayment of Bridge Securities

5 August

Sub-Division of Ordinary Shares*

5 August

Debt for Equity Swap and New Senior Notes Share Issue*

5 August

Date from which Additional Commitment Issue applies*

8 August

Completion of Open Offer, Bridge Securities Share Issue and Early Subscriber Issue*

24 August

Consolidation of Ordinary Shares*

24 August

Expected completion date of the Restructuring*

24 August


* Assuming that the Resolution is approved

Recommendation

If Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of new Ordinary Shares in connection with the Restructuring, it is expected that the economic terms of the Alternative Restructuring, together with the requirement to initiate a sale of the Group's business, will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment.

In the Board's opinion, the Restructuring, including the Open Offer is in the best interests of Afren and the Shareholders taken as a whole.  Accordingly, the Afren Board unanimously recommends Shareholders to vote in favour of the Resolution to be proposed at the General Meeting, as all Directors have irrevocably undertaken to do in respect of their own beneficial holdings of Existing Shares, amounting to 6,640,839 Existing Shares and 0.6% of the total number of votes available to be cast at the General Meeting.

Prospectus

The Prospectus, containing full details of how Shareholders can participate in the Open Offer, and the Notice of General Meeting are expected to be published shortly.  Copies of the Prospectus will be available on the Company's website, www.afren.com.  Copies of the Prospectus will also be available from the registered office of the Company at 1 Pall Mall East, London, SW1Y 5AU during usual business hours on any weekday (not including Saturdays, Sundays or any public holidays in the United Kingdom) from the date of its publication until Admission.

General Meeting

The implementation of the Restructuring is conditional upon, inter alia, the approval of the Shareholders at a general meeting of the Company, which is expected to be held at 11.00 a.m. on 24 July 2015 at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW. 

 

APPENDIX I

Details of the Alternative Restructuring

The Alternative Restructuring

If the Alternative Restructuring is implemented, the Directors believe that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the disposal of the Group's assets or other return of income or capital by the Company.  The Alternative Restructuring, if implemented, should allow the Group to remain as a going concern to enable an orderly sale process in accordance with the requirements of the New Senior Notes.  Under the Alternative Restructuring, the Amended Ebok Facility will still be effective and the New Senior Notes will still be issued, but on amended terms.  No new ordinary shares will be issued in connection with the Alternative Restructuring and the Open Offer will not be made available to Shareholders, so the Existing Shareholders will continue to own 100% of the Company's issued share capital and will not suffer dilution to their shares.  However, the Company will not receive any proceeds from the Open Offer.

Furthermore, the Alternative Restructuring will include the following amendments to the terms of the Restructuring:

·           US$5 million of the Bridge Securities will not be repaid via the issue of new ordinary shares under the Bridge Securities Share Issue and the Bridge Securities will become repayable in full pursuant to the issue of the New Senior Notes;

·           the Debt for Equity Swap will not be implemented and, instead, the US$234 million of Existing Notes which would have been repaid under the Debt for Equity Swap will be reinstated as a new series of notes that will become due in December 2021, with interest at 20.2% per annum payable in kind (the "New 2021 Notes");

·           the terms of the New Senior Notes will be amended (the "Alternative New Senior Notes") such that:

o   the principal amount of the New Senior Notes will be increased to approximately US$401 million (from US$369 million) due to (i) an increased discount of 5% to the issue price of the New Senior Notes, (ii) the early subscription fee being payable in cash (rather than in Ordinary Shares pursuant to the Early Subscriber Issue) and (iii) US$5 million of the Bridge Securities being payable by the issue of additional New Senior Notes;

o   the interest rate on the New Senior Notes will be adjusted, with (i) interest of 7.1% per annum payable in cash on the principal amount of the New Senior Notes, (ii) interest of 2.5% per annum payable in kind on the principal amount of the New Senior Notes being capitalised under a separate class of payment in kind notes (due in August 2017) (the "New Senior PIK Notes") and (iii) interest of 26.9% per annum payable in kind on the principal amount of the New Senior Notes being capitalised under a separate class of payment in kind notes (due no earlier than six months after the maturity date of the Amended Ebok Facility) (the "New Junior PIK Notes");

·           no new Ordinary Shares will be issued, either under the terms of the Bridge Securities, the New Senior Notes or pursuant to any equity offering to existing Shareholders;

·           the holders of the Alternative New Senior Notes will also have the right to appoint a majority of the Company's Board and the board of directors of the Notes Issuer and Afren International Limited, with control over the process for the sale of the Group's business, under the terms of an investor rights agreement (the "Investor Rights Agreement"); and

·           it will be an event of default under the Alternative New Senior Notes if:

o   the Company does not take certain steps to initiate a sale of all or substantially all of the Group's business by the end of 2015; and/or

o   the Company has not entered into an agreement or agreements (each a "sale agreement") for the sale of all or substantially all of the Group's business by the end of 2016; and/or

o   Shareholders do not approve the terms of any sale agreement when put to them for approval; and/or 

o   any binding sale agreement is terminated as a result of a failure to satisfy conditions of such agreement (other than shareholder approval), provided that such termination shall not in any event be an event of default before 31 March 2017; and/or

o   the Company, the Notes Investor or Afren International Limited breaches the terms of the Investor Rights Agreement.

Any sale or disposal of the business or assets of the Group pursuant to the Alternative Restructuring will be subject to the provisions of the Listing Rules on substantial transactions and may require shareholder approval as appropriate. 

If Shareholders fail to approve the sale of such assets (by way of a simple majority of Shareholders attending and voting in general meeting), holders of the Alternative New Senior Notes will be able to accelerate repayment of such notes upon such event of default and enforce their security under the Alternative New Senior Notes (as noted above) without further recourse to shareholder approval.  Additionally, there would be cross-defaults to the Group's other facilities which would allow the relevant holders and/or lenders to accelerate the repayment of such facilities at such time.  Accordingly, any failure by Shareholders to approve the terms of the disposal of all or substantially all of the Group's assets would allow holders of the Alternative New Senior Notes, as well as the Group's other secured lenders, to enforce their security and Shareholders would be unlikely to receive any return of income or capital by the Company following such enforcement.

In addition to the outstanding aggregate principal amount of US$1,789 million due under the Alternative New Senior Notes, the New 2019 Notes, the New 2020 Notes, the New 2021 Notes, the Amended Ebok Facility, the Amended Okwok/OML 113 Facility and the OML 26 Facility, payment in kind interest will accrue on the Alternative New Senior Notes (under the New Senior PIK Notes and the New Junior PIK Notes) as specified above, as well as cash and payment in kind interest accruing on the Group's other indebtedness.  Accordingly, it is highly likely that the value of the Group's debt will exceed the value of the Group if the Group is sold or if the Group's assets are sold as required by the terms of the Alternative New Senior Notes.

Therefore, if Shareholders do not approve the Resolution at the General Meeting, including granting authority for the issue of new Ordinary Shares in connection with the Restructuring, it is expected that the economic terms of the Alternative Restructuring (being the terms of the Alternative New Senior Notes, the obligation to pay US$934 million in principal (and interest) under the New 2019 Notes, the New 2020 Notes and the New 2021 Notes, together with the requirement to initiate a sale of the Group's business), will mean that the Shareholders would be unlikely to receive any proceeds from the sale of the Group or the required disposal of the Group's assets or other return of income or capital by the Company, and therefore the Shareholders would be unlikely to see any return of their current investment. 

 

 

APPENDIX II

Definitions

The following definitions apply in this announcement unless the context requires otherwise.

2016 Notes

the senior secured notes due 1 February 2016;

2019 Notes

the senior secured notes due 8 April 2019;

2020 Notes

the senior secured notes due 9 December 2020;

Alternative Restructuring

the Restructuring, on adjusted terms arising as a result of a failure by Shareholders to approve the Resolution by the requisite majority;

Amended Ebok Facility

the amendment agreement entered into between Afren and the Ebok Lenders in respect of the Ebok Facility;

Amended Okwok/OML 113 Facility

the amendment agreement with Access Bank in respect of the Okwok/OML 113 Facility;

Bridge Noteholders

holders of the Bridge Securities and certain of their respective affiliates;

Bridge Securities

the US$211,640,211.64 million of private placement notes due 25 April 2016 issued by the Company in connection with the Interim Funding pursuant to the Note Purchase Agreement;

Bridge Securities Share Issue

the new Ordinary Shares to be issued to Bridge Noteholders (or their nominees), in an aggregate amount representing 5% of the fully diluted share capital of the Company following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Early Subscriber Issue;

Companies Act

the UK Companies Act 2006 (as amended);

Debt for Equity Swap

the release and conversion into equity of 25% of the face value of the outstanding principal amount (and accrued interest) of the Existing Notes (being US$234 million) pursuant to the issue of new Ordinary Shares to Existing Noteholders, which will result in Existing Noteholders holding 80% of the increased share capital of the Company immediately following such conversion;

Early Subscriber Issue

the additional new Ordinary Shares representing 10% of the fully diluted share capital of the Company to be issued to certain of the Existing Noteholders who subscribed for New Senior Notes following the completion of the Debt for Equity Swap, the New Senior Notes Share Issue, the Open Offer and the Bridge Securities Share Issue;

Ebok Facility

the US$300 million revolving credit facility dated 24 March 2010, as amended and restated on 23 June 2010, 3 March 2011 and 22 March 2013, between Afren Resources, Afren and the Ebok Lenders in respect of Ebok;

Ebok Intercreditor Agreement

the intercreditor agreement dated 3 February 2011 between, among others, Afren, the trustee for the 2016 Notes and BNP Paribas (in its capacities as Senior Agent and security agent for the lenders under the Ebok Facility and also in its capacity as Ebok Collateral Agent);

Ebok Lenders

BNP Paribas, Citibank, N.A., London Branch, Natixis, Deutsche Bank AG, Amsterdam Branch, Firstrand Bank Limited, acting through its Rand Merchant Bank Division, Merrill Lynch International Bank Limited, London, Nedbank Limited, London Branch, Sumitomo Mitsui Banking Corporation Europe Limited, Stanbic IBTC Bank Plc and Standard Chartered Bank and any bank or financial institution which accedes to the Ebok Facility;

Excluded Territories

Australia, Canada, Japan, New Zealand and the Republic of South Africa, and each an "Excluded Territory";

Existing Noteholders

holders of Existing Notes;

Existing Notes

the 2016 Notes, the 2019 Notes and/or the 2020 Notes, as applicable;

Existing Shares

the existing Shares of 1 pence each in nominal value in the capital of the Company as at the date of this document;

General Meeting

the general meeting of the Shareholders to be held at 11.00 a.m. on 24 July 2015;

ICA 2

the additional Ebok intercreditor agreement;

ICA 3

the separate Ebok intercreditor agreement;

Interim Funding

the provision of US$200 million in net interim funding pursuant to the Note Purchase Agreement;

New 2019 Notes

approximately US$350 million of new notes due 2019 to be issued by the Notes Issuer;

New 2020 Notes

approximately US$350 million of new notes due 2020 to be issued by the Notes Issuer;

New 2021 Notes

under the Alternative Restructuring, the reinstatement of the Existing Notes as a new series of notes that will become due in December 2021, with interest at 20.2% per annum payable in kind;

New Junior PIK Notes

the new junior payment in kind notes due no earlier than six months after the maturity date of the Amended Ebok Facility;

New Senior Notes

the new senior notes due August 2017 to be issued by the Company pursuant to the Scheme;

New Senior Notes Share Issue

the new Ordinary Shares to be issued to holders of New Senior Notes in accordance with the Scheme;

New Senior PIK Notes 

the new senior payment in kind notes due August 2017;

Note Purchase Agreement

the agreement entered into on 30 April 2015 by the Company, the Bridge Noteholders and Wilmington Trust (London) Limited in respect of the issue of the Bridge Securities;

Notes Issuer

Afren Finance plc, a newly incorporated direct subsidiary of the Company;

Notes Issuer Guarantor

Afren International Limited, a newly incorporated direct subsidiary of the Company;

Notice of General Meeting

the notice of the general meeting of Shareholders;

Okwok/OML 113 Facility

the bridge loan facility entered into between Afren Exploration & Production Nigeria Alpha Limited, as borrower, and Afren and FHN 113 Limited, as guarantors, pursuant to an offer letter dated 30 September 2014;

OML 26 Facility

the US$100 million loan agreement dated 25 February 2014 made between FHN 26 as borrower and Zenith Bank plc as lender;

Okwok/OML 113 Lender

Access Bank;

Open Offer

the pre-emptive open offer to all Shareholders, comprising up to £49.2 million in new Ordinary Shares;

Open Offer Entitlements

the invitation by Afren to Qualifying Shareholders to apply to acquire 4 Open Offer Shares for every 9 Existing Shares at a price of 1 pence per Open Offer Share;

Open Offer Shares

The up to 4,922,491,218 Ordinary Shares being offered by the Company to Qualifying Shareholders pursuant to the Open Offer;

Ordinary Shares or Shares

the ordinary shares in the share capital of Afren, comprising (i) before the Sub-Division, ordinary shares of 1 pence each (ii) after the Sub-Division and before the Consolidation, ordinary shares of 0.00001 pence each and (iii) after the Consolidation, ordinary shares of 0.0001 pence each;

Qualifying non‑CREST Shareholders

Qualifying Shareholders holding Existing Shares in certificated form who are not resident in an Excluded Territory or the United States;

Qualifying Shareholder

shareholder(s) on Afren's register of members on the Record Date;

Record Date

close of business on 6 August 2015;

Resolution

the resolution to be proposed at the General Meeting (and set out in the Notice of General Meeting at the end of this document) to, among other things, facilitate and approve the Open Offer and the issue of the New Shares;

Restructuring

the financial, debt and corporate restructuring of the Group contemplated by the Scheme, the Restructuring documents and the explanatory statement to the Scheme, including (but not limited to) any and all connected compromises/agreements with persons that are not parties to the Scheme;

RWC Scenario

the Company's reasonable worst case scenario to its working capital requirements;

Scheme

the scheme of arrangement under Part 26 of the Companies Act between Afren and the Scheme Creditors, with any modification, addition or condition which the Court may think fit to approve or impose;

Scheme Creditors

the persons with a beneficial interest as principal in the Existing Notes held in global form through the Common Depositary at the Record Date (as defined in the Scheme);

Security Reorganisation

the transfer of all or substantially all assets of the Group to the Notes Issuer or the Notes Issuer Guarantor, in satisfaction of the relevant condition to the Scheme; and

Shareholder

a holder of Shares.

 

 

Notes

This announcement is for information purposes only and does not constitute an invitation or offer to buy, sell, issue, underwrite, acquire or subscribe for, or the solicitation of an offer to buy, sell, issue, acquire or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

In particular, this announcement does not constitute or form part of any offer to buy, sell, issue, acquire or subscribe for, or the solicitation of an offer to buy, sell, issue, acquire, or subscribe for, any securities in Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction into which such offer or solicitation would be unlawful. No public offering of the securities referred to herein is being made in the United Kingdom, Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction.

This announcement is not an offer of securities for sale in the United States. The securities referred to above have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States absent registration or an exemption from registration as provided in the US Securities Act and the rules and regulations thereunder. There has not been and will not be a public offer of the securities in the United States.

The distribution of this announcement in certain jurisdictions may be restricted by law. No action has been taken that would permit an offering of any securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Disclaimer and cautionary note on forward looking statements and notes on certain other matters

Certain statements in this announcement are not historical facts and are or are deemed to be "forward-looking". The Company's prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; "may", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "will", "could", "may", "might", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond Afren's ability to control or predict. Forward-looking statements are not guarantees of future performances.

Factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the countries in which Afren operates; future prices and demand for the Company's products; global oil production; trends in the oil & gas industry and domestic and international oil & gas market conditions; risks in oil & gas operations; future expansion plans and capital expenditures; the Company's relationship with, and conditions affecting, the Company's partners and regulators; competition; weather conditions or catastrophic damage; risks relating to law, regulations and taxation in the countries in which Afren operates, including laws, regulations, decrees and decisions governing the oil & gas industry, the environment and currency and exchange controls and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are as described in the Company's annual report.

Forward-looking statements are made only as of the date of this announcement. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this announcement to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law.

 

 

 


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