Dubai-Gulf Keystone Petroleum has reached a major debt restructuring agreement with the majority of its creditor in a move designed to save the company from imminent bankruptcy and allow it to continue developing the giant Shaikan oil field in Iraqi Kurdistan. In a statement Thursday, the company said the deal, if approved by shareholders, would result in its debt being reduced to $100 million from over $600 million, but would massively dilute the existing shareholders’ equity in the company to 5%, leaving the remainder of Gulf Keystone’s shares in the hands of current lenders. However, shareholders would be get a chance to participate in a $25 million open offer for 10% of Gulf Keystone’s equity at closing of the restructuring.
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