Market Report: Afren directors bail weeks before troubled oil explorer's last-gasp refinancing


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The Independent Online

Talk about jumping from a sinking ship. The chairman and directors of Afren have bailed weeks before the troubled oil explorer’s last-gasp refinancing.

The executive chairman, Egbert Imomoh, and non-executive directors Toby Hayward, Patrick Obath, Sheree Bryant and Iain McLaren have all left the firm, which hopes to draw a line under an “unauthorised payments” scandal involving its former chief executive and chief operating officer.

In comes David Frauman, a restructuring lawyer, as chairman, while David Thomas, who was recently drafted in as chief operating officer, has been given an executive seat on the board, which will be beefed up soon, investors were told.

D-day for Afren is 24 July, when shareholders vote on a $300m debt-for-equity swap that will leave them with about 10 per cent of the firm. The new chief executive, Alan Linn, said: “This is the only viable option and there is no room for renegotiation.”

In less than a year, shares in Afren slumped from 150p to just 2p as it struggled to deal with mounting debts and falling oil prices. Last night, they closed 0.09p higher at 2.09p. The veteran oil analyst Malcolm Graham-Wood said earlier this month: “Surely one for the business school handbooks of just how quickly a management can destroy a company in such a limited timeframe.”

On his way out, former Shell man Imomoh told shareholders he was leaving the company “with a clear plan for its bright future”. They might disagree.

The FTSE 100 index closed 36.98 points lower at 6,807.82 as hopes of a Greek deal petered out.

The Korean snacks giant Orion confirmed its bid for the South Korean arm of Tesco. Another seven interested parties, including private equity investors Carlyle Group, CVC Partners and Affinity Equity Partners, are also reportedly circling the Homeplus unit, said to be worth $5bn. Tesco rose 1.95p to 217.75p.

Investors dialled into telecoms group Netcall on the Alternative Investment Market after it received a takeover approach from payments specialist Eckoh. The cash-and-shares deal values Netcall at about £86m, and its shares rose by 3.75p to 56p.