Market Report: It wasn't going to end well for Afren shareholders

 

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You could tell that it wasn’t going to end well for Afren shareholders.

The cash-starved, Africa-focused oil and gas operator has been trying desperately  to renegotiate its debt and earlier this month defaulted on a $15m (£10m) interest payment. Yesterday it set out plans for a highly dilutive debt-for-equity swap with lenders – a deal that would leave existing shareholders with just  11 per cent of the company. It may not be pretty, but if investors don’t back it, Afren could go to the wall, management warned. Afren dropped 1.85p to 4.65p; the shares were changing hands for 150p a year ago.

The FTSE 100 slipped 20.49 points to 6,740.58 and marked its worst week so far this year, having lost 171.63 points since Monday.

Glencore was the biggest faller, off 8.4p at 277.35p as the commodity giant announced it was taking a 49 per cent stake in the Russian oil producer Russneft as part of a restructuring. The deal comes despite fears that Russia could be hit with fresh sanctions from Europe and the US.

A fresh threat of a crackdown on energy companies from Ed Miliband hit the power sector. The Labour leader wants to give the regulator the power to force energy providers to pass on cuts in wholesale prices to consumers, plans first reported in The Independent yesterday. The British Gas owner Centrica slipped 3.5p to 237.9p, while SSE fell 29p to 1,462p.

Meggitt jumped 15.5p to 575p as Investec raised its target price for the aerospace engineer to reflect the beneficial impact of the weak euro.

The oil company Soco International tumbled on Thursday after slashing reserve estimates, but management took this as a buying opportunity. Chairman Rui de Sousa shelled out £89,500 on Soco shares, while non-executive John Norton spent £18,000 bolstering his position. Soco dropped 15.4p to 143.2p.

Deutsche Bank is still trying to get out of the  Legoland owner Merlin, a week after it found itself holding 7 per cent when a placing went wrong. It has offloaded another 6 million shares, but it still owns  5.97 per cent of Merlin, up 4.6p at 430p.

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