Saturday 27 December 2014

Shares in Providence fall as company announces new loan agreement

Published 16/06/2014 | 12:55

GSF Arctic III rig which was used in drilling at Barryroe
GSF Arctic III rig which was used in drilling at Barryroe

SHARES in Providence Resources dropped by close to 10pc in early trading this morning, ahead of the announcement of a new financing deal.

The oil and gas exploration company’s stock dropped to €1.68 a share from Friday’s close of €1.86 in early trading.

Shares regained some of the lost ground to reach €1.75 each by lunch time in Dublin.

The company announced today that it had entered a new loan agreement with US based Melody Business Finance LLC.

Providence is borrowing $24m for a one year term, secured by a floating charge, at an interest rate of 10pc.

The money is to be used for general working capital purposes, Providence said in a stock market announcement.

“Ten percent on a one year loan is expensive debt,” said Sam Wahab, an analyst at Cantor Fitzgerald in London.

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