Gulf Keystone bondholders need more time

Less than a fortnight after setting out a plan to tidy up its finances, Gulf Keystone has had to give bondholders more time to decide whether to back the deal or not. There is no explanation given by the struggling oil company, but having to extend a deadline to qualify for incentives does imply that the number of potential backers unwilling to sign is significant enough.

Gulf, which operates the Shaikan field in the Kurdistan region of Iraq, said on 12 March it wanted to amend the trust deed constituting the $250 million 13% Guaranteed Notes due 2017. Currently, it must offer to buy back the notes at 101% plus interest at the end of September.

Instead, Gulf offered noteholders who agreed to the changes by 5pm on 23 March $5 in cash for each $1,000 in principal amount of the notes outstanding. Those who consent by 1 April, the expiration date, get $1.50 for each $1,000.

Now, management has extended the so-called "Early Consent Time" to 5pm on 1 April.

There is no further detail, although we were told earlier this month that Gulf had "confidentially discussed the consent solicitation with a number of significant noteholders, and, based on the noteholders' responses during those discussions, expects them to be supportive." We'll see.

A meeting will be held in London on 7 April to either pass or reject the Extraordinary Resolution.

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