NEW YORK (Reuters) - Investment firm EIG Pacific Holdings Ltd said on Wednesday it had extended the deadline and changed some terms for its offer to buy nearly all the debt of Colombia’s largest private oil producer, Pacific Exploration & Production Corp..
The deadline for the offer for Pacific’s $4.1 billion in debt has been extended until March 24 from Feb. 10. As part of the new offer, EIG, a subsidiary of Harbour Energy Ltd, said it had reduced the amount it is willing to pay bondholders because oil prices have continued to drop and Pacific E&P’s financial condition has deteriorated.
EIG hopes to ultimately take control of Pacific, which is based in Toronto. The deal is also conditioned on insolvency proceedings beginning.
“Our goal remains to keep Pacific intact and avoid the death-spiral the company appears to be facing,” said EIG Chief Executive R. Blair Thomas. “It seems apparent that Pacific is insolvent and that a bankruptcy filing is imminent.”
Pacific has been struggling as oil prices have plummeted, and state-owned Ecopetrol did not renew its lease on an oilfield.
The extension of the deadline for the tender offer comes as Pacific tries to avoid default on bond payments. The company is in a 30-day grace period for payments missed in January. Its lenders also gave it waivers that expire at the end of February.
Ratings agencies have lowered Pacific’s ratings to default level.
A limited number of Pacific bondholders participated in the tender offer EIG first proposed.
Reporting by Jessica DiNapoli; Editing by Sandra Maler
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