Edge Resources Inc's lender demands debt repayment

2016-04-05 06:59:02

(MENAFN- ProactiveInvestors - N.America) Edge Resources Inc (LON:EDG CVE:EDE) has told investors that Alberta Treasury Branch (ATB) has demanded repayment of a US$8.4mln debt.

ATB also issued a 'notice of intention to enforce security' under Canada's Bankruptcy and Insolvency Act.

The company - currently suspended on AIM - told investors that it is continuing talks with a subordinated lender to acquire the debt from ATB.

'While the company is hopeful and encouraged that its subordinated lender will acquire the debt which would allow the company to continue operating there are no guarantees this will happen before the deadline imposed by ATB' the company said.

Edge shares are currently suspended because it does not have a nominated advisor and it is expected that its listed will be cancelled on April 15 as it does not intend to appoint a new one.

City broker SP Angel in a note said: 'While the company will struggle to pay C$8mm from current resources we believe that there is a mechanism through which it can not only restructure the debt but emerge in a better condition that it was previously.

'However it will involve further cost reductions despite the cost base being reduced already but further cost savings will need to be made; it is now a case of being honest enough to make the reductions and whether the management will be given the chance to do so.'

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