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Sound Energy Shares Rally 28% After Bondholders Approve Notes Restructuring Plan

Simon Mugo trader
Updated 14 Apr 2021

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Shares of Sound Energy PLC (LON: SOU) rallied 28% after bondholders approved the restructuring of €28.8 million 5.0% senior secured notes due in June 2021.

We recently covered the company and said that we would be monitoring it to see if the bondholders will approve the new restructuring measures and were relieved with today’s announcement.

The bondholders agreed to extend the notes’ maturity to December 2027, with the notes being partially amortised by 5% every six months starting December 2023.

The company will convert €3.5 million worth of notes into ordinary shares priced at 2.13p each. The company will pay 2% interest on the notes each year, with the remaining 3% being deferred interest payable upon maturity.

Sound Energy’s shares had formed a parabolic rally. We warned investors to be cautious about opening new positions in the company due to the pullbacks that typically follow such rallies.

With most of its operation in Morrocco, the gas exploration and production company has gotten a new lease of life following today’s announcement, making it attractive to investors.

However, I think its stock price is quite extended and would not be buying at current prices. I want to see a deeper pullback before jumping in.

Sound Energy share price.

IG chart of Sound Energy share price 14-04-2021

Sound Energy shares rallied 28.07% to trade at 3.33p, rising from Tuesday’s closing price of 2.60p.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading