June 12 (Reuters) - Oil and gas explorer Penn Virginia Corp has hired an investment bank to help it explore a possible sale, less than a year after it emerged from bankruptcy, as its former creditors seek to cash out, according to people familiar with the matter.
The move illustrates how distressed debt hedge funds, which snapped up oil and gas companies' bonds for pennies on the dollar during the energy price downturn, now hold big stakes in companies that have exited bankruptcy and are seeking to sell, as the sector slowly recovers.
Penn Virginia has hired investment bank Jefferies LLC to help it evaluate strategic alternatives including a potential sale, the people said on Monday. Talks with potential acquirers are under way, and a deal is not certain because of the company's high valuation expectations, the sources added.
The sources asked not to be identified because the deal negotiations are confidential. Penn Virginia and Jefferies did not immediately respond to requests for comment. (Reporting by Jessica Resnick-Ault and Jessica DiNapoli in New York; Additional reporting by David French in New York; Editing by Matthew Lewis)