Providence forced to extend Chinese funding deadline
Shares in Providence Resources were down more than 10pc yesterday after it once again extended a deadline to receive $10m (€8.9m) from Chinese backer APEC.
The Dublin-listed oil and exploration company previously said it had received a letter from HSBC Bank on July 5, saying the funds would be paid on July 9. It was the latest in a series of delays.
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By close of business on Wednesday, the money had not been received.
In addition, Providence has not had any additional paperwork from APEC or its corresponding bank to verify the transfer of funds.
The deadline to receive the loan has now been extended to close of business today.
The Providence board of directors, headed by Tony O'Reilly Jnr, does not expect to give any further extension after this. Providence and its associates - known collectively as the 'Barryroe Partners' - said they had been given assurances that the transfer process is under way.
"The Barryroe Partners are seeking immediate clarification from APEC's funders and its banks on the precise status of the transfer. Accordingly, to facilitate this, the Barryroe Partners have agreed to extend the backstop date to close of business on Friday, July 12, 2019," Providence said.
"Should [the partners] either not receive the required funds or adequate evidence that the transfer will be processed as a matter of urgency, the board does not envisage giving any further extensions to the backstop date," it added.
The loan is to be used to fund a survey of the Irish oil and gas explorer's Barryroe prospect off the Cork coast.
Funding from APEC had initially been expected late last year, and was then due to be paid over on June 14. This was then extended to July 5. Drilling operations at the Barryroe site are expected to take place in the fourth quarter of 2019, a date that has been pushed back because of the delay to the planned survey at the site.
The group now expects the survey to be carried out in the third quarter of this year, assuming it receives the funds.
Under the terms of the updated farm-out agreement with APEC, a total of $24m (previously $19.5m) has been allocated to fund the forward costs of Exola, operator of the Barryroe project.