Lancashire Fracker Caudrilla suffered a near heart attack two days ago when it’s Australian co-owner, AJ Lucas, (which owns 41% of Cuadrilla) nearly ran out of cash. AJ Lucas’ shares have been suspended from trading on the Australian Stock Exchange since May. The company this year also reported an $11.5m full-year loss.
It was imperative, therefore, that yesterday’s Cuadrilla test results showed the company in the best possible light. Caudrilla is the Australian’s ace card and AJ Lucas needs the company to look squeaky clean – to intice investors to throw more money at the troubled parent.
This year AJ Lucas must pay off AUS $110 of debt and tax liabilities. A futher $43 million is held in ‘convertible notes’, redeemable at 90 days notice. The company is also supposed to be buying up $10m of further Cuadrilla stock.
Fortunately help was at hand in the form of Hong Kong based Kerogen Investments. AJ Lucas announced yesterday that Kerogen will input AUS$50m to increase its holding in AJ Lucas to 15%. Kerogen has also agreed to provide a $66.5m loan facility.