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Iona Energy CEO Tom Reynolds. Image courtesy of Iona Energy.

Ontario-based independent Iona Energy called a bondholders meeting Thursday to seek a payment extension on $135 million in debt and approval for a proposed financial restructuring plan in response to low oil prices.

If bondholders approve the amendments the company can change the conditions of its 2013 bonds.

Iona is asking bondholders to grant a full waiver of financial covenants, including net debt/EBITDA and minimum capitalization ratios, until its Orlando project in the UK North Sea achieves first oil.

Iona holds a 75 percent operating stake in the Orlando field.

The field is expected to start production in Q4 2015 at an initial gross production rate of 11,000 barrels per day.

The company is also seeking a conversion of interest payments to non-cash payment-in-kind for 2015 and 2016 as well as a a deferment for scheduled 2016 amortization payments totaling $85 million until bond maturity in 2018.

The company said it wants to conduct a review process to” work through a number of alternatives to ensure the business is fully funded to first oil at Orlando.”

“The review will result in a proposal being made to bondholders for their approval by end June 2015,” Iona said.

Iona is also asking its creditors to appoint a new independent director to its board.

The company said it expects to reduce its board to “not more than six directors.”

According the company’s website there are currently seven members on its board of directors.

The company is also asking bondholders to approve a bonus warrants plan that would grant bondholders a fee in the form of non-transferable warrants to purchase common shares of Iona representing in aggregate 10 percent of  existing common shares.

The bonus warrants would have an exercise price of $0.04 per warrant, would be exercisable until September 27, 2018 and would be subject to a hold period of four months and a day from issuance.

Issuance of the bonus warrants must be approve by the TSX Venture Exchange.

Forty percent of bondholders have committed to the deal, the BBC said.

The company needs to win approval from two-thirds of its bondholders to pass the proposed amendments.

The meeting is scheduled for March 27.

“The amendments provide a strong foundation for the management team to execute its strategy which includes delivering first production from the Orlando project,” CEO Tom Reynolds said.