Shares in Providence fall as company announces new loan agreement
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.