Premier Oil Creditors Vote For Deals, New Debt Plan

Shadia Nasralla and Shanima A
Thursday, February 13, 2020

Creditors of Premier Oil gave the indebted oil and gas producer their approval for $800 million of North Sea acquisitions under a scheme that would allow it to delay debt repayments and issue new shares. 

The vote supporting Premier's management is a blow to hedge fund ARCM, which holds 15% of Premier's debt and has had a growing short position in its shares since 2017, currently around 17% of its stock, some four times higher than the average for London-listed firms. 

ARCM has fought a heavily publicized battle against Premier's plans, saying they were based on too-high commodity price assumptions, too-low decommissioning liability estimates and would make Premier too dependent on a weak gas market. 


Related: BP, Premier Oil in $625M North Sea Deal


An investor with a short position makes a profit on a stock when its price declines. Premier's shares rose around 20% after it announced its plans on Jan. 7, but have since lost most of that ground to trade at 104.5 pence, up 6.4% year-to-date. 

Shares in Premier Oil spiked higher following the announcement, and by 1317 GMT they were up 3.1% at session highs. 

Premier needs investors representing at least 75% of its outstanding debt of around $2 billion to agree to its plans under an arrangement reached with its creditors in a debt restructuring in 2017. Wednesday's vote still needs to be formally approved by a judge in a hearing expected on March 17. 

Of the creditors subject to the schemes, 86% of Super Senior Commitments and 75% of Senior Commitments have agreed to vote in their favor at the creditor meetings, Premier said, referring to different classes of bondholders. 

(Reporting by Shadia Nasralla in London and Shanima A in Bengaluru; editing by Nick Macfie)


Related: Hedge Fund Questions Premier Oil's Plans



Categories: Mergers & Acquisitions North Sea Industry News Activity Europe

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