Coho Defaults on Debt
Coho Energy was notified by its lenders last week that it was
in default on an $89.6 million over-balance. The company failed to
make the first of five scheduled payments on the balance, which
resulted from an overall $239.6 million debt. The lenders reserved
all rights, remedies and privileges as a result of the payment
default, but Coho said it expects to continue to discuss a
financing alternative with the bank group.
In late February, Coho's lenders redetermined the borrowing base
of the overall debt to be $150 million. Coho was supposed to make
the first payment on the over-balance March 2.
The default comes weeks after Coho failed to come to an
agreement with the Hicks, Muse, Tate & Furst (Hicks, Muse) on
selling its majority interest to the investment firm for $250
million. Hicks, Muse wanted the share price offer to be dropped
from $6 to $4 per share, increasing the interest it would acquire
from 62% to 71%. Coho considered the option, but was unable to
close the deal, leaving it unprotectedto investors.
Based in Dallas, TX, Coho is engaged in oil and gas exploration
and development. Through three quarters in 1998, the company
experienced a net loss of $71.1 million compared to an income of
$4.6 million in the same period of the previous year. The company
said the loss is a result of the devaluation of oil and gas
©Copyright 1999 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.