Freeport-McMoRan (FCX) plans to merge its oil and gas subsidiary, Freeport-McMoRan Oil & Gas (FM O&G) with the parent company, after its proposed US$2 billion asset sale to Anadarko Petroleum failed to gain support from the company's lenders.
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Image from FCX. |
The decision comes after the period for consent solicitation expired on 28 September. FCX had previously extended the period from 23 September.
“As of the expiration time, FCX, FM O&G and FCX O&G had not received the consent of holders of at least a majority in aggregate principal amount outstanding of each series of notes subject to the consent solicitations,” FCX said in a statement. “As a result, no consent fees will be paid and FCX plans to merge FM O&G into FCX prior to completing its previously announced deepwater Gulf of Mexico (GoM) sale transaction.”
Bloomberg reported on 29 September that lenders objected to the proposed sale of assets to Anadarko due to language in FCX's credit agreement, which would prevent the firm from selling "a substantial amount of its assets in one or more related transactions unless the debt is assumed by the buyer," the article said.
On 12 September, Houston-based Anadarko announced its intentions to purchase FCX’s GoM assets in a $2 billion cash deal that would also double the Houston-based independent’s stake in the Lucius field, which it operates, to 49%. The acquisition could have been considered an excellent pick up for Anadarko because FCX paid some $9 billion to buy the assets of Plains Exploration & Production and McMoRan back in 2012.
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