The final size of the transaction, which will be determined at the time of pricing, will be convertible into up to approximately 5.1 million shares or 10% of Imperial's outstanding share capital.
The seven-year Convertible Bonds are expected to carry a coupon of between 5.50% and 6.25% per annum and the conversion price is expected to be set at a premium of between 40% and 45% to the volume weighted average price of Imperial's ordinary shares from launch to pricing. The Convertible Bonds will be issued and redeemed at par on maturity. The Issuer has the right to redeem all outstanding Convertible Bonds after the fifth anniversary of closing if the ordinary shares of Imperial trade at 130% or more of the then prevailing conversion price for a specified period of time. The Convertible Bonds are expected to price today and closing is expected on or about 18 December 2007.
The net proceeds of the Offering will be used to finance the purchase of three Chinese drilling rigs, to accelerate the development program of new production wells and necessary infrastructure, to advance the Group's exploration program and for general corporate purposes, including to repay USD 35 million of the Group's debt finance facility
Applications will be made for the Convertible Bonds to be listed and admitted to the Official List of the UK Listing Authority and admitted to trading on the Professional Securities Market of the London Stock Exchange plc.
Merrill Lynch International and ABN AMRO Rothschild are Joint Bookrunners and Joint Lead Managers for the Offering.
Peter Levine, Imperial's Chairman, commented:
"Imperial has already delivered on its 2007 production and exploration targets and has an increasingly aggressive development program that will see a significant increase in production from current levels. The proposed funding will contribute substantially to the speed of progress and effectiveness in execution of its business plans that is a hallmark of Imperial's success".
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