Business
Offer Talks Terminated
Offer Talks Terminated.
About this update from Cloudbreak Discovery Plc
[{"type":"text","content":"\n Cardinal Resources plc\n18 September 2007\n\nStock Exchange Announcement\nFor immediate release\nLondon - 18 September 2007\n\n\nTakeover talks terminated. Refinancing discussions continue.\n\nCardinal Resources plc (AIM: CDL) ('Cardinal' or the 'Company'), an independent\noil and gas exploration and production company operating in Ukraine, today\nannounces that the discussions with multiple parties announced on 3 September\n2007, which could have led to an offer being made for the Company, are not now\nexpected to lead to any such offer being forthcoming. Takeover talks have\ntherefore terminated.\n\nThe origin of more than one of these discussions was the need, described at the\ntime of Cardinal's 2006 results announcement on 30 June 2007, to conclude\nnegotiations for a medium term financing package and raise equity finance either\nby way of institutional private placement or underwritten rights issue.\nDiscussions with one or more potential equity providers continue.\n\nOn 30 June 2007, Cardinal announced that it was in discussions with Silver Point\nCapital to restructure the bridge PIK notes first issued on 23 December 2005 and\nthat it had obtained a Commitment Letter from Hares Group Holdings GmbH ('Hares\n'), to fund the Company's working capital requirements in case of any shortfall\nover the period ending 1 July 2008. The detailed terms of the Silver Point\nCapital PIK note facility require prior consent of Silver Point Capital (as is\nnormal for a senior lender) before Cardinal is able to draw down on any\nsubordinated loan such as that provided for by the Hares Commitment Letter. As\npart of the current negotiations, Silver Point Capital have not provided consent\nto such a drawdown. Instead of drawing down under the Hares Commitment, Cardinal\nis therefore seeking to re-designate and access a portion of the undrawn US$14.1\nmillion RC re-instatement facility for general working capital purposes.\nFollowing the last covenant review, Silver Point Capital have neither waived\ncovenant breaches nor issued any notice of default. In the meantime, Cardinal's\ncash-flow remains very tight.\n\nConclusion of negotiations and improvements in cash flows have been hampered by\na delay in start up of production and sales from the new gas gathering and\nseparation facility which the Directors had hoped would commence some week...