By Joe Hoppe
Zoltav Resources Inc. shares fell on Monday after it said it entered into two non-revolving credit facilities with Sberbank Rossia, which it says will require it to significantly reduce its overheads and potentially abandon its AIM listing.
Shares at 9:05 a.m. GMT were down 8.0 pence, or 24%, to 26.0 pence.
The Russia-focused oil and gas exploration and production company – which struck the deals as part of its plans to commercialize the eastern fields of the Bortovoy license in Saratov, Russia – said the first loan represents a maximum installation amount of 7.7 billion rubles ($ 106 million) with a final repayment date of September 25, 2031, while the second represents a maximum amount of 700 million rubles, with the final repayment due January 1, 2024.
The company said the terms of the financing will restrict intra-group transfers and cash outflows from its main operating subsidiary, forcing it to significantly reduce the company’s overheads and rationalize non-project costs.
This will make it difficult to maintain the license obligations vis-à-vis its Koltogor licenses, its offshore corporate structure and its AIM listing. He reiterated that he will not be able to repay or refinance his shareholder loan and will have to seek authorization to issue new shares at 27 pence per share.
The company has said it will conduct a thorough analysis of its other options, but it is likely that it will have to delist its shares after a few months.
Write to Joe Hoppe at [email protected]