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- Global Oil & Gas (GLV) has entered a deed of assignment with Cervantes Corporation (CVS) in relation to a loan agreement
- Under the agreement, GLV will receive $450,000 by the end of next month
- The current debt under the loan agreement is valued at $900,000, is interest-free and repayable by June 8, 2021
- However, the repayable date can be extended a further 12 months if 50 per cent of the loan is paid off by the due date, along with a $25,000 extension fee
- On the market this morning, GLV is up 4.35 per cent and trading at 2.4 cents per share
Global Oil & Gas (GLV) has entered a deed of assignment with Cervantes Corporation (CVS) in relation to a loan agreement.
Under the agreement, GLV will receive $450,000, which includes a $35,000 upfront deposit and the remaining $415,000 will be paid by the end of next month.
The initial loan agreement was signed in 2012 between GLV and CVS.
CVS has been under a long-term suspension from the ASX since May 30, 2019, and had around $220,000 cash in hand as of December 31, 2020.
The current debt under the loan agreement is valued at $900,000, is interest-free and repayable by June 8, 2021.
However, the repayable date can be extended a further 12 months, if 50 per cent of the loan is paid off by the due date, along with a $25,000 extension fee.
Additionally, due to the unlikelihood of repayment by CVS, the carrying book value of the loan over the years has been reduced and in the latest GLV December half-year accounts has a carrying book value of $340,000.
“This is a good result for GLV shareholders in being able to hopefully realise value of $450,000, being significantly above the current book value, for a loan which was approved and entered into by the previous board of GLV to CVS,” Executive Director Patric Glovac said.
“The loan was then amended by the common directors reducing the face value to $900,000, repayable with 24 months notice and interest-free,” he added.
On the market this morning, GLV is up 4.35 per cent and is trading at 2.4 cents per share at 10:19 am AEST.
