IGas Assets 'Raid' by Bondholder

UK-listed independent IGas Energy has confirmed that it is under pressure from a bondholder to divest cash-generative assets.

“As it [IGas] seeks a capital structure appropriate for the business in the current operating environment,” the UK shale gas explorer said October 31, “it continues to discuss a range of options with a number of key stakeholders. Those include discussions with bondholder Trans European Oil & Gas (TEOG) – whose largest shareholder is understood to be KKR – who has proposed a sale of the company's conventional assets.”

Kohlberg Kravis Roberts (KKR) is a leading New York-based private equity fund.

George Roberts (left) and Henry Kravis, co-chairmen and joint CEOs of New York-based KKR (Photo credit: KKR)

Sky News reported October 30 that KKR-backed TEOG is pressing IGas Energy to divest its conventional resources arm, with producing assets in the UK east Midlands and the Weald Basin in southern England. Sky cited sources who believe TEOG itself wants to acquire those IGas assets.

IGas said that it will “continue discussions with its key stakeholders concurrent with a number of strategic investors as it continues to assess options which will allow the company's capital structure to be sustainable in the current oil price environment and enable the group to capitalise on value accretive opportunities.”

A hearing into IGas's application to drill and hydraulically fracture wells in the east Midlands is due to go before Nottinghamshire county council's planning authority in November, after having been deferred from earlier this month after a late representation from pressure-group Friends of the Earth.

Mark Smedley