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Echo Energy Shares Jump After Completion of Debt Restructuring

Sam Boughedda trader
Updated 30 Mar 2021

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Shares of Latin America focused oil and gas firm Echo Energy (LON: ECHO) have spiked in the last couple of hours after the company said it has now successfully completed the restructuring of its debt obligations.

The company held a meeting on Tuesday with the holders of its Luxembourg listed €20 million 8.0% secured notes to consider proposals for restructuring, which were approved by an 84% majority.

As part of the restructuring, the notes' maturity will be extended by three years to the 15th of May 2025, with all cash interest payments on the notes rolled to the maturity date.

It also means that the previously announced conditional restructuring of its €5 million 8.0% secured convertible debt facility will now become effective.

The Debt Facility restructuring will see its final maturity extended to April 2025, with no further cash interest payments required before final maturity.

“The new arrangements result in no cash payments to Noteholders until maturity in 2025. This enables the Board to focus on rapidly delivering on its strategy to improve shareholder returns,” said Martin Hull, Echo's CEO.

“Commodity price strength, including the very material increases in gas price recently announced, combined with the more than doubling of oil production following the ongoing infrastructure upgrades, provide a markedly improved and positive outlook for shareholders,” added Hull.

Echo Energy Price Chart
Source: IG

Echo Energy’s share price is currently trading 16% higher at 0.88p per share.

Should you invest in Echo Energy shares?

Echo Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Echo Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.