Premier Oil Launches $250M Convertible Bond Offering
Premier Oil plc plans to make an offering (the "Offering") of approximately USD 250 million guaranteed convertible bonds due 2014 (the "Convertible Bonds") to international institutional investors. The Convertible Bonds, which will be issued by Premier Oil Finance (Jersey) Limited (the "Issuer"), will be convertible into preference shares of the Issuer which are exchangeable for fully paid ordinary shares of Premier. Premier will act as Guarantor of the Convertible Bonds.
The final size of the transaction, which will be determined at the time of pricing, will be convertible into up to approximately 8.2 million shares or 10% of Premier's outstanding share capital.
The seven-year Convertible Bonds are expected to carry a coupon of between 2.875% and 3.375% 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 Premier's ordinary shares from launch to pricing. The Convertible Bonds will be issued and redeemed at par on maturity subject to a share settlement option in favour of the Issuer on customary terms. The Issuer has the right to redeem all outstanding Convertible Bonds after the fifth anniversary of closing if the shares of Premier 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 27th June 2007.
Premier is issuing the Convertible Bonds to benefit from the attractive financing opportunities available in the current convertible market. Proceeds of the offering will initially be utilised to pay down existing debt, and then to fund part of Premier's development program over the next three years.
Application 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.
Barclays Capital and Merrill Lynch International are the Joint Bookrunners and Joint Lead Managers for the Offering.
Simon Lockett, Premier's Chief Executive, commented:
"Premier has an extensive development program that will see a significant increase in production from current levels. The proposed funding will contribute substantially to the investment required."
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