LONDON, April 29 (Reuters) - A British court on Wednesday
approved Premier Oil's plans to extend debt maturities
by two years and raise up to $500 million in equity to buy North
Sea assets from BP and others, but the deal depends on market
conditions, Premier said.
Activist hedge fund ARCM, which has a short position on
Premier's shares of around 17% and holds around 15% of its debt,
said it would appeal the court's decision, which delays any
further action until the appeal is resolved.
Other creditors have backed the plans which under British
rules also required court approval.
Oil prices have slumped about two-thirds to around
$20 a barrel since Premier in January first announced its
acquisition plans and the financial arrangements linked to
Wednesday's ruling.
"Premier continues to assess the viability of satisfying
those conditions and therefore of completing the proposed
transactions in light of the current market conditions," Premier
said.
Industry bankers have said any equity raising in the sector
was tough at current oil prices.
The proposed acquisitions include oil major BP's
stake in the Andrew and Shearwater fields and an increased stake
for Premier in the Tolmount gas project for $625 million and
$191 million, respectively.
"It is important to note that... the schemes cannot become
effective without a minimum equity raise of $350 million," ARCM
said in a statement.
"As per our previous statements, Premier Oil should abandon
the acquisitions and focus on its cash flow position and
protecting the balance sheet as a matter of priority."
Premier, whose market capitalisation stood around $272
million on Wednesday, had net debt of about $1.9 billion as of
December.
(Reporting by Shadia Nasralla, additional reporting by Maiya
Keidan and Simon Jessop; Editing by Emelia Sithole-Matarise)
