According to the U.S. Bankruptcy Court docket, London, U.K.-based Afren filed for Chapter 15 protection in the District of Delaware. The Company, which is a holding company with subsidiaries focused on the exploration, development and production of oil assets, is represented by Fox Rothschild.
The Company previously filed a Scheme of Arrangement with the Chancery Division of the High Court of Justice of England and Wales. Court-filed documents explain, “In light of the significant uncertainty in the industry and related financing markets resulting from the rapid decline in oil prices, and the material funding constraints faced by the business from January 2015, the Directors initiated a series of actions to stabilize the Group’s capital structure and a review of the Group’s liquidity requirements and funding sources. The actions and review were intended to address the immediate funding requirements of the business and manage the overall high leverage of the Group. This process ultimately resulted in the Directors’ approval of the Bridge Securities to enable the Group to continue to operate while the Restructuring (and the Alternative Restructuring) were developed so as to be capable of implementation, in part, by the Scheme.”
The Company further notes, “Historically, Afren has utilized a combination of short and long term financial instruments to supplement cash flow from operations to finance its cash needs. Events following the dismissal of the Group’s former chief executive officer and chief operating officer, including Afren’s inability to continue the planned refinancing of debt obligations in 2014, as well as the sharp decline in oil prices, have placed significant pressure on the Group’s liquidity position, resulting in the Group having net current liabilities of $458.5 million as of December 31, 2014.”
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