North Sea oil group Xcite Energy heading for liquidation after crunch talks fall apart
North Sea oil firm Xcite Energy is headed for a liquidation within weeks that will see shareholders wiped out after crunch talks between management and bondholders broke down.
Shares in the Aim-listed firm were suspended today after negotiations to hand 98.5 per cent of Xcite's shares to lenders failed to reach a deal.
The group's main asset is the Bentley Heavy Oil Field on the East Shetland Platform on the North Sea, where it has existing reserves of at least 267m barrels of oil.
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Xcite said in a statement its bondholders were "not satisfied that the transaction is capable of being implemented in a manner acceptable to them".
"On this basis, they expect to instruct the bond trustee to petition the court in the British Virgin Islands within the next 10 days requesting the appointment of a liquidator to the company, which is expected to take effect approximately four to six weeks from the filing of such request," Xcite added.
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Liquidation will be "unlikely to result in the return of any value to the company's existing shareholders".
The company is headquartered in the British Virgin Islands, but operates in the UK out of an office in Aberdeen.
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An Xcite shareholder told City A.M. the firm had promised its investors it would hold an extraordinary general meeting this month before any further discussions were conducted with bondholders.
After being informed of Xcite's plans, shareholders began planning to vote against the proposal to give bondholders a 98.5 per cent share of the company, and more than the required 25.1 per cent intended to vote against it at the EGM.
Xcite Energy has been could not be reached for comment.