Completion of debt restructure and RRTL sale

RNS Number : 5856I

Star Phoenix Group Ltd

02 April 2020

 

Star Phoenix Group Ltd

("Star Phoenix" or "the Company")

2 April 2020

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

COMPLETION OF DEBT RESTRUCTURE AND RRTL SALE

Star Phoenix (AIM: STA), an international company with oilfield services business in Trinidad and oil and gas interest in Indonesia, is pleased to announce that the sale of Range Resources Trinidad Limited ("RRTL") to LandOcean Energy Services Co., Ltd. ("LandOcean") has completed (the "Transaction").

Following completion of the Transaction, all of the Company's debt and payables (US$95.1 million as at 31 March 2020) to LandOcean have been offset and repaid, and all debt agreements with LandOcean have been terminated.

In addition, as previously announced LandOcean has paid the Company a total cash consideration of US$1,508,000 to date, which has now been released to the Company. The rigs previously mortgaged to LandOcean have also been discharged and released.

The Company and LandOcean have agreed that the remaining US$1,000,000, plus an interest rate of 8% per annum, calculated daily from 31 March 2020 until the payment is received, will be paid on or before 30 April 2020 (the "Final Payment"). Until the Final Payment is received (the "Post Completion Period"), LandOcean has agreed to ensure that RRTL will continue to carry on its business in the normal course of business, there will be no change of directors of RRTL. During the Post Completion Period, all profits and interim payables (including net revenue from the sale of oil) of RRTL, received by RRTL will be paid to the Company.

Following disposal of RRTL, which held all of the Company's oil and gas interests in Trinidad, the Company's residual business comprises oilfield services in Trinidad with 12 onshore land rigs valued by an independent party Shanghai Orient Appraisal Co., Ltd. in February 2020 at US$21.8 million, as well as an interest in the oil and gas project in Indonesia.

As part of a wider restructuring, the Company continues to evaluate new strategic business opportunities and to review options with regards to its rigs business and its Indonesia interest.

At the date of this announcement, the Company has nil debt and unrestricted cash of approximately US$2.9 million.

Star Phoenix's Chairman, Kerry Gu, commented:

"I am delighted with the completion of debt restructuring, which required months of hard work and extensive negotiations, particularly in consideration of very challenging economic conditions and a downturn in the oil and gas sector.

Completion of this milestone transaction is a fantastic outcome for the Company's shareholders as it places Star Phoenix in a very advantageous position, completely debt-free, with healthy cash balance, and sufficient cash resources to progress with new opportunities.

Over the coming months, our focus will be on reviewing options for our drilling business in Trinidad and the Indonesian oil and gas project, introducing cost-cutting measures across the Group and streamlining the residual operations. We also continue to evaluate new strategic business opportunities.

I am very excited about the future of Star Phoenix and once again would like to thank our stakeholders for their continued support during this process."

This announcement has been approved by Chairman Kerry Gu on behalf of the Company.

Contact Details
Star Phoenix Group Ltd Evgenia Bezruchko (Group Corporate Development Manager & Joint Company Secretary) e. [e-mail] t.   [phone]	Cantor Fitzgerald Europe (Nominated Adviser and Broker) David Porter / Rick Thompson (Corporate Finance) t.   [phone]

 

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