Sovereign founder Burgess quits oil services group amid debt talk

Published on Tuesday 1 December 2009 20:39

GRAHAM Burgess, the entrepreneur who once tried to establish a professional rugby team in Stirling, has quit his oil services company as concerns over its debts mount.

Burgess, the founder, chairman and chief executive of Sovereign Oilfield Group, resigned with immediate effect on Monday night, along with finance director Julie Cowie.

Their departures came as the Aberdeen firm revealed it may be forced to undertake a debt-for-equity swap.

Debt-laden Sovereign warned last month it had reopened negotiations with lenders after breaching its debt arrangements.

The company, which is listed on the Alternative Investment Market, has long battled with debts of over 30 million, with shares suspended from trading for seven months from late 2008 while it arranged new banking terms.

Sovereign has sold several of its businesses this year. Burgess said in September that the actions taken by the company had positioned it for future growth.

Yesterday, it said refinancing talks with lenders were continuing, warning that one of the options was a debt-for-equity swap, "which would be dilutive to current shareholders, but would reduce the debt".

Chief operating officer Chris McGeehan, who is due to leave at the end of this month, is acting as interim chief executive. Shares in Sovereign dropped 37.5 per cent to 5p.