Is now the right time to buy Afren?

Afren‘s shares have fallen in value by almost 99% over the past year, as the oil and gas producer defaulted on its interest payments. Its debt burden, which currently stands at $1.65 billion, has become unsustainable with the lower oil price, and the company is now seeking debt restructuring and recapitalisation.

The recapitalisation plan

Bondholders have agreed to a debt-for-equity swap, which will see 25% of existing bonds being converted into equity. This will reduce the company’s debt by $233 million. Afren will raise about $225 million in net cash proceeds through a combination of the issuance of new high yield notes and a share offer to existing shareholders. The proceeds will be used to fund development of its production assets in Nigeria.

Read more: Is Now The Right Time To Buy Afren plc? – Yahoo Finance UK