Is it true Borrowers of London Capital Finance Never Defaulted?
One of the claims that London Capital Finance have made is that their loans have never defaulted and they have claimed a 100% track record. That statement seems rather suspect when you look at some of the loans made to companies that were ultimately funded by LCF.
One example is Atlantic Petroleum based in the Faroe Islands. It had an agreement to borrow £8 million from London Capital & Finance via a company called London Oil and Gas (LOG). LOG borrowed £50 million from London Capital Finance and have loaned money to at least 2 small oil exploration companies, Atlantic and another called Independent Oil and Gas.
The key one to look at is Atlantic Oil & Gas. In a statement made in March 2017 but not fully reported at the time they stated:
It further adds that at the time the loan was made, Atlantic Petroleum were trying to avoid going in to administration (the company going bust)
It appears that the £8 million loan was converted into £8 million of shares in Atlantic Petroleum as of March 2017. This means that the money loaned by LCF is now in the form of shares and is not available to be returned as cash.
Remember these shares are for a company that was on the verge of going bust. It doesn't sound like a very safe way to invest the money that LCF bondholders were expecting to be secure. It also means that the cash is no longer there to repay investors.
https://www.offshoreenergytoday.com/atlantic-petroleum-restructures-debt/
https://www.offshoreenergytoday.com/a-lifeline-for-atlantic-petroleum/
https://www.offshoreenergytoday.com/uncertain-future-for-atlantic-petroleum/
One example is Atlantic Petroleum based in the Faroe Islands. It had an agreement to borrow £8 million from London Capital & Finance via a company called London Oil and Gas (LOG). LOG borrowed £50 million from London Capital Finance and have loaned money to at least 2 small oil exploration companies, Atlantic and another called Independent Oil and Gas.
The key one to look at is Atlantic Oil & Gas. In a statement made in March 2017 but not fully reported at the time they stated:
Atlantic Petroleum restructures debt.
It further adds that at the time the loan was made, Atlantic Petroleum were trying to avoid going in to administration (the company going bust)
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| London Capital Finance - Is it true Borrowers Never Defaulted? |
Remember these shares are for a company that was on the verge of going bust. It doesn't sound like a very safe way to invest the money that LCF bondholders were expecting to be secure. It also means that the cash is no longer there to repay investors.
It turns out that the loan has been converted into shares in Atlantic Petroleum. So if the loan has not been repaid and is not getting any interest, how are the returns being made to investors?
Swapping debt for shares (equity) is one way of avoiding a default but is it sustainable long term?
https://www.offshoreenergytoday.com/atlantic-petroleum-restructures-debt/
https://www.offshoreenergytoday.com/a-lifeline-for-atlantic-petroleum/
https://www.offshoreenergytoday.com/uncertain-future-for-atlantic-petroleum/
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