Rex International Holding Limited: Comprehensive Update on Lime Petroleum Holding Financial Situation and Restructuring Efforts

Key Points from the Report

• Financial Challenges: Lime Petroleum Holding AS (LPH), a subsidiary of Rex International Holding Limited, is facing significant financial challenges. Increased drilling costs and delayed revenue from oil production in Benin have put considerable strain on the LPH Group’s liquidity.
• Funding and Restructuring: LPH is actively seeking funding to address outstanding debts but has not yet formalised a plan to resolve short-term liquidity issues. A financial review and potential restructuring process has begun, indicating the company is considering various remedial actions.
• Asset Cash Call Requirements: Lime Petroleum AS (LPA) faces cash call requirements for its interests in the producing Yme Field (25%) and the discovery asset Bestla Field (17%) in Norway. There are grace periods for these cash calls until early April 2026 and end April 2026 respectively. Failure to meet these obligations may result in LPA losing its interests in these assets.
• Brage Field Status: For the Brage Field (33.8434%) in Norway, cash call obligations are up to date as of 16 March 2026.
• Creditor Protection: LPH’s board has received legal advice under Norwegian law to prioritise safeguarding the interests of LPH’s creditors given its current financial situation. This suggests heightened risk for equity holders and a shift in responsibility to creditors.
• Bondholder Actions and Restructuring Advisors: On 16 March 2026, Nordic Trustee AS (Bond Trustee for LPH’s 2027 and 2028 Bonds) issued a summons for a Written Resolution to bondholders. This resolution seeks approval for interim liquidity funding and engagement of Alvarez & Marsal Europe LLP as restructuring advisors, including a chief Restructuring Officer, and possibly additional advisers. The measures are in anticipation of a comprehensive recapitalisation of the LPH Group.
• Market Updates: Rex International Holding Limited has committed to updating the market in accordance with SGX-ST rules on any material developments.

Important Considerations for Shareholders

• Liquidity Risks: The ongoing liquidity crisis and potential inability to meet cash calls could lead to the loss of valuable asset interests (Yme and Bestla Fields). This would impact future revenue and asset value, posing a direct risk to share value.
• Creditor Priority: Legal advice indicates that creditor interests may now take precedence over shareholder interests, especially during restructuring. This increases risk for shareholders, as their interests may be subordinated in the event of insolvency or further financial distress.
• Bondholder Actions: The involvement of bondholders in approving urgent liquidity measures and restructuring advisors signals the seriousness of the financial situation. The outcome of the Written Resolution and subsequent actions could materially affect the company’s financial standing and share price.
• Potential Restructuring: The engagement of Alvarez & Marsal Europe LLP and possible further advisers points to substantial restructuring efforts, which could involve asset sales, debt restructuring, or other actions that may affect shareholder value.
• Shareholder Advice: The company advises shareholders and potential investors to exercise caution when trading shares, given the ongoing uncertainties and risks. Those unsure about their actions should consult professional advisers.

Detailed Analysis

Rex International’s subsidiary, Lime Petroleum Holding AS, is experiencing acute financial stress, primarily due to rising drilling costs and delayed oil production revenues from Benin. Despite ongoing efforts to secure funding, no formal plan has been established to address immediate liquidity concerns. The situation is compounded by imminent cash call requirements for its Norwegian assets. If Lime Petroleum AS fails to meet these cash calls within their respective grace periods, it stands to lose its interests in the Yme (25%) and Bestla (17%) Fields—both significant assets for future revenue generation.

The company’s position in the Brage Field (33.8434%) remains stable for now, with cash calls up to date. However, the broader financial review and restructuring process, bolstered by legal advice under Norwegian law, means the board must now focus on protecting creditor interests. This shift may have serious implications for shareholders, as creditors’ claims could take precedence in any restructuring or insolvency scenario.

The bond trustee, Nordic Trustee AS, has initiated a process for bondholders to approve an urgent interim liquidity injection and the engagement of restructuring and financial advisors. The firm Alvarez & Marsal Europe LLP has been proposed to provide restructuring advisory services and a chief Restructuring Officer, a clear sign of the severity and complexity of the situation. The outcome of these resolutions and the recapitalisation plan could significantly affect Rex International’s financial health and, consequently, its share price.

Rex International has committed to keeping the market informed of any material changes, but shareholders should be aware that the current crisis could result in asset losses, creditor-driven restructuring, or even insolvency if liquidity is not restored.

Investor Warning

Shareholders and potential investors are strongly advised to exercise caution. The company’s financial situation is precarious, with credible risks to asset value and shareholder interests. Consult legal, financial, tax, or other professional advisers if you are uncertain about your position or actions regarding Rex International shares.

Disclaimer

This article is based on official updates from Rex International Holding Limited and is intended for informational purposes only. It does not constitute financial advice, and readers should conduct their own research or consult professional advisers before making any investment decisions. The financial situation described is subject to change, and material developments may impact share value.

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