TORONTO: Financially embattled Oilexco (TSX: OIL; LSE: OIL) has received demand letters from the Royal Bank of Scotland, on behalf of itself and other lenders, for immediate payment of amounts outstanding under the US$547.5 million senior and super senior credit facility of Oilexco North Sea Ltd. (ONSL) with the banks.
The demands are pursuant to guarantees given by Oilexco of ONSL’s obligations under the credit facilities when the facilities were entered into.
On Jan. 7, an English court appointed representatives of Ernst & Young as joint administrators to manage the affairs, business and property of ONSL. The joint administrators have continued a previously initiated process for the sale of shares and assets of ONSL.
Oilexco, via a wholly owned subsidiary, has submitted a non-binding expression of interest to acquire certain assets of ONSL by assumption of future obligations related to the assets. Other parties have also expressed interest in the assets or shares. The sale will be concluded prior to the end of the first quarter of 2009, but the ultimate buyer is unknown at this time.