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Andes Energia CEO Alejandro Jotayan. Image courtesy of ProactiveInvestors Stocktube/Youtube.

UK-based Andes Energia agreed Tuesday to acquire a 51 percent interest in Norway-based Interoil Exploration and Production through  a $4.8 million investment in a private placement.

The investment will cover 330,000 Interoil shares priced at $0.01 per share.

“We expect that the strengthened balance sheet, will help restore normal credit lines and bank guarantees, which will provide further flexibility to Interoil’s operations going forward,” Andes Energia CEO Alejandro Jotayan said.

The subscription is conditional upon Interoil successfully restructuring a $41.73 million bond loan and a $6.2 million debt tied to Proseis AG, a surveying firm founded by former members of Interoil E&P Switzerland.

As part of the restructuring, current bondholders will convert part of the bond to 65,000,000 new shares in Interoil, equivalent to 10 percent of the shares outstanding after the private placement and the restructuring.

Once the conditions of the deal have been fulfilled Andes will hold a 51 percent stake in Interoil.

Interoil said it hopes the investment will help alleviate the company’s current “financial and strategic challenges.”

“The board of directors supports this proposal. It balances well the interests of the Company’s financial stakeholders, and provides a solution to the Company’s current challenges”, Interoil chairman Leif Chr. Salomonsen said.