Afren appoints industry veteran Linn as new chief executive

Afren, the financially distressed oil and gas explorer, on Tuesday appointed industry veteran Alan Linn as its next chief executive amid talks to conclude a recapitalisation plan for the London-listed company.

Mr Linn, who following a 15-year career with ExxonMobil had spells at Cairn Energy and Tullow Oil, is currently a consultant to Afren.

Afren, the Nigeria-focused oil producer, said Mr Linn had agreed to take on the role of chief executive upon completion of interim financing arrangements expected in the coming days.

Shares in Afren, which have lost 97 per cent of their value over the past year, rose almost 6 per cent to 3.34p on Tuesday, giving the company a market capitalisation of £37m.

In his most recent management role, Mr Linn was chief executive at Sydney-listed Roc Oil, which last August called off merger talks with rival Horizon Oil in favour of accepting a rival $440m takeover offer by Fosun of China.

His proposed appointment comes six month after Afren sacked its former chief executive, Osman Shahenshah, for gross misconduct after an investigation found secret payments had been funnelled to him and fellow senior managers without the knowledge of other board members.

Since Mr Shahenshah's departure, Egbert Imomoh, the former Royal Dutch Shell manager, has acted as executive chairman of Afren. However, his months in charge have coincided with an oil price crash, the failure of the company to meet a number of deadlines for payments to lenders, and the collapse of takeover talks.

<

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Afren faces a deadline of April 30 to make a $50m payment to lenders originally due in January. The payment is connected to a $300m debt facility.

In March, Afren defaulted on a $15m of interest payment due on some of its bonds. In February, takeover talks with Seplat, another Nigeria-focused oil producer, were abandoned.

However, last month Afren reached an agreement with lenders on a recapitalisation plan for the company.

Afren conceded that shareholders would end up with only 11 per cent of the company's stock following a debt-for-equity swap aimed at securing $300m in new funding by July.

Last week, Afren said it was "making good progress on satisfying the relevant conditions precedent to the provision of the interim funding", adding that it expected to finalise completion of these arrangements "imminently".

Mr Linn's proposed appointment comes amid investigations into the running of Afren under previous management.

Two weeks ago the company confirmed that it had notified the UK's Serious Fraud Office after legal advisers raised concerns "regarding the hire of an individual within its operations in 2012 and the payment of certain travel and accommodation expenses connected to Afren's activities".

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation