By Odunewu Segun
Indigenous oil and gas operator Seven Energy International Limited may be for a rough time following its inability to fulfill payments on two senior secured notes issued by one of its subsidiaries Seven Energy Finance Limited.
The company blamed its inability to meet its debt obligations on the closure of the Forcados export terminal which lead to a loss of cash flow, and power stations that were yet to pay for gas it had supplied.
National Daily gathered that the company had earlier in the year defaulted on a $445 million loan taken from a consortium of banks led by Ecobank, FCMB, and Union Bank in 2015 to provide working capital for Accugas, one of its subsidiaries.
Banks, and other financial institutions that bought the secured notes will not get their payments. Seven energy, thus setting the stage for a legal battle between all the company’s creditors.
According to a news posted on the company’s website, Seven Energy said it is discussion with Savannah Petroleum Plc and the group’s lenders, including an ad hoc group of holders of the $300,000,000 ten percent senior secured notes due 2021 and the $100,000,000 ten and half percent notes due 2021, as part of the comprehensive capital restructuring of the group.
Senior secured notes are debt securities, or bonds, that take precedence over other unsecured notes in the event of bankruptcy. Senior notes must be paid first if assets are available in the event of a company’s liquidation.
Seven Energy, founded in January 2004 is an integrated oil and gas company with assets located in the South Eastern region of Nigeria.