News

April 22, 2009

Sterling Energy Agrees Bank Waiver As It Fights For Its Financial Survival

There was some light relief for shareholders in Sterling Energy on Tuesday morning when the cash-strapped E&P announced it has signed a bank waiver on loan repayments. The waiver will run until mid-August, buying the AIM firm some time to find a longer term solution to its current funding crisis. CEO Graeme Thomson said completion of the new arrangement was “clearly a very important step forward for Sterling”.

Last month the company revealed a funding gap of US$28 million after its syndicated debt facility was trimmed to reflect the fall in energy prices. The news came as the lead bank in the syndicate, Natixis, cautioned that Sterling’s borrowing base would be US$76 million, giving rise to a debt gap of US$28 million. Under the waiver, Sterling expects to continue to service its adjusted cash flow obligations until at least the next scheduled Borrowing Base re-determination, due mid-August...