Roc to Raise $219 Million
Roc Oil Co. Ltd. is pleased to announce a fully underwritten pro-rata renounceable 3 for 8 rights issue ("Rights Issue") of approximately 81 million ordinary shares with an issue price of $2.70 per share to raise gross proceeds of $219 million.
Shareholders entitled to participate ("Eligible Shareholders") are those with a registered address in Australia, New Zealand, Hong Kong, Singapore, Japan, Switzerland, or Qatar, and certain Qualified Investors in the United Kingdom. These shareholders will be offered 3 New Shares in the Company for every 8 Existing Shares held on 10 November 2006. Trading of Rights will commence on ASX on 3 November and end on 20 November. The Rights will not trade on AIM or be renounceable in the UK.
The $2.70 issue price represents a discount of about 24% to ROC's closing share price of $3.55 per share on 31 October and a discount of 25% to the weighted average share price of $3.60 for the preceding month. The New Shares will rank equally with existing ordinary shares of ROC.
The primary purpose of the Rights Issue is to enable ROC to reduce debt incurred in relation to the recent acquisition of a 24.5 % operated interest in the Zhao Dong Block in the Bohai Bay, offshore China. The Rights Issue will also provide greater financial flexibility for the Company to continue to build shareholder value.
The Rights Issue is fully underwritten by UBS AG. Oriel Securities Limited and Commsec will act as co-managers to the Rights Issue.
A Prospectus in relation to the Rights Issue will be lodged with the Australian Securities and Investments Commission and Australian Stock Exchange today. The Prospectus will be made available when the securities are offered and Eligible Shareholders wishing to acquire the securities will need to complete the application form that will accompany the Prospectus. Acceptances close on 27 November.
Subsequent to the Rights Issue, ROC will have approximately 297.7 million ordinary shares on issue.
Commenting on the capital raising, ROC's Chief Executive Officer, Dr John Doran, said:
"ROC has always maintained a consistent attitude towards borrowing – we don't like it, but we are prepared to wear an appropriate amount of logical debt. When ROC looked at buying the Zhao Dong assets it was obvious that Apache was never going to sell for anything other than cash and the only way for ROC to provide the cash was to arrange a debt facility.
"Immediately after the Apache deal was announced in June 2006, people started enquiring as to when and how we would restructure the 12-month loan facility. Until yesterday, our response was always the same: we are considering almost everything and we are committed to nothing.
"Today, we committed to a Rights Issue that will substantially reduce the debt to an optimum level. The Rights Issue is deliberately designed to treat all Eligible Shareholders fairly and equally. It provides Eligible Shareholders with an attractively pitched issue price and the opportunity to participate in ROC's next growth phase – which promises to be every bit as exciting as any we've experienced in the past."
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