UK oil company Premier Oil has informed that its lending group has agreed to defer and replace the test of its financial covenants.
Premier, which is in discussions with the lending group on the terms of its existing financial facilities, said on Friday that the talks were progressing well and that the company’s test of financial covenants at June 30, 2016, would be waived and replaced by a test for the 12 month period ending July 31, 2016.
According to the company, this deferral allows further time to agree amendments to Premier’s medium term covenant profile and the resetting of its debt maturities. In return for the proposed amendments, it is anticipated that additional security will be provided for existing debt holders.
Premier expects negotiations to conclude during the third quarter of 2016. Further deferral of the covenant test date will be sought if required, the company added.
Premier also said the company continues to have access to undrawn funds within its Revolving Credit Facility (RCF) to allow the company to meet its ongoing funding requirements.