Xcite shares plunge as investors warned

Xcite Energy shares bombed yesterday after the company said bondholders would pursue enforcement action over their loans unless a restructuring of the financial terms hands them near-100% ownership.

The firm which is headquartered in Surrey, but has its operations base in Aberdeen, said enforcement action was “unlikely to result in the return of any value to the company's existing shareholders”.

Xcite's directors insisted the move was “in the best interests" of the company, giving it a significantly stronger balance sheet.

The firm said it was also in talks to secure a working capital facility of up to £7.7million.

Shares plummeted 42% to an all-time low of 1.25p.

Xcite has been struggling to sort out its finances to support its flagship Bentley project in the UK North Sea. Negotiations are still being concluded with the main holders of bonds worth nearly £115million, but Xcite expects that – subject to shareholder approval – all of the value of the outstanding debt will be exchanged for 98.5% of the company.

Xcite is planning an extraordinary general meeting of shareholders to consider and vote on the move. The firm said: “A circular to shareholders will be issued as soon as practicable, containing an explanation of, and rationale for, the proposed restructuring, including the likely consequences for shareholders and the company should the proposed restructuring not be supported at the shareholder EGM.

“The directors understand that, should shareholders not support the proposed restructuring at the shareholder EGM, the bondholders intend to pursue enforcement action against the company.”