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UPDATE 1-Singapore-listed Linc Energy enters voluntary administration

Published 15/04/2016, 07:11 pm
UPDATE 1-Singapore-listed Linc Energy enters voluntary administration
LCO
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LINC
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* Appoints PPB Advisory as administrators

* Cash and equivalents at A$4.7 million as of Dec. 31 (Adds details, statement from administrator, cash position)

SINGAPORE, April 15 (Reuters) - Singapore-listed oil and gas company Linc Energy Ltd LINC.SI entered into voluntary administration on Friday, it said in a statement to the Singapore Exchange, suffering from debt woes amid a slump in energy prices.

The company said it had appointed Stephen Longley, Grant Sparks and Martin Ford of PPB Advisory as administrators.

Linc Energy's businesses include oil and gas operations in the United States as well as exploration for shale oil and gas in south Australia. And while oil prices have recovered somewhat this year, benchmark Brent futures LCOc1 are still down more than 60 percent from peaks hit in mid-2014.

The company, which shifted its listing to Singapore from Australia in end-2013, had cash and equivalents of A$4.7 million ($3.6 million) at the end of last year, while its borrowings stood at A$726.4 million, slightly higher than its total assets.

"The administrators are working with the company's management team to fully understand the options available ... which may potentially include a restructure of the company at an appropriate time," Linc said in a statement to the exchange.

A string of Australia resource and materials companies, have recently entered into voluntary administration, stung by a ramp up in output just as China's economy started to slow and commodity prices plunged. compiled by Reuters shows at least 10 Australian companies in the materials sector hold debt three times their earnings before interest and tax and amortisation in 2015.

Shares in Linc had been suspended since end-March. The shares, which have a market value of $11.6 million, had fallen about 85 percent so far this year.

PPB Advisory said it was focussed on working with Linc's management to review the company's operations and assets in Australia and the United States. It said Linc Energy will continue on a business-as-usual basis during the review.

When reporting its results in February, the company had said its operating cash flows indicated that it may not have sufficient working capital to cover interest payments due in the next 12 months.

The company's largest shareholders include Peter Bond, its former chief executive, as well as Malaysian conglomerate Genting Bhd's GENT.KL investment arm, according to Linc's 2015 annual report.

($1 = 1.2965 Australian dollars)

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