* Chrysaor shareholders to own 77% of new entity
* Premier creditors to be paid $1.23 bln cash out of $1.9
bln owed
* Have option to take new shares up to 18% of new entity
* Premier shareholders to hold 5.5% of new entity
(Adds details from prospectus)
By Julia Payne and Shadia Nasralla
LONDON, Dec 16 (Reuters) - Premier Oil will be
renamed Harbour Energy Plc after a reverse takeover by private
equity-backed Chrysaor due to complete in the first quarter of
2021, Premier said on Wednesday.
Struggling to deal with heavy debt after its profits were
slashed by a drop in oil prices during COVID-19 lockdowns,
Premier struck a deal with Chrysaor in October to create the
British North Sea's largest oil and gas producer.
Premier's shareholders will vote on the transaction on Jan.
12. Chrysaor shareholders, primarily private equity firm Harbour
and Singapore's GIC, will own up to 77% of the new firm.
Creditors of Premier, which has net debt of $1.9 billion and
a market capitalisation of $284 million, will receive $1.2
billion in cash under the merger and debt restructuring plan
from a new debt facility and existing cash from both groups.
This on average represents a payout of around 61 cents for
each dollar owed, the prospectus said. They can also elect to
receive further shares representing up to 18% of the new group,
or a cash alternative bringing the payout to around 75 cents.
Existing Premier shareholders will hold around 5.5% of the
new company.
Premier chief executive Tony Durrant has stepped down from
the board as part of the merger transition, with finance
director Richard Rose taking over as interim CEO on Jan. 1.
Once the merger is complete, Linda Cook will become Harbour
Energy CEO and Blair Thomas chairman of the group, which is
expected to produce 200,000-220,000 barrels of oil equivalent
per day next year.
The prospectus said the combined group is seen generating
enough free cash flow to support shareholder returns, and a
sustainable dividend is expected to be introduced with respect
to the financial year to Dec. 2021.
Chrysaor has hedged about 67% of its first-half 2021 oil
output at an average $60 a barrel, and over 70% of its gas
volumes.
Premier's takeover could herald wider consolidation but the
pool of buyers is small in a sector with an uncertain outlook,
with many leading energy companies looking to sell large parts
of their portfolios as they shift towards renewable energy.
(Reporting by Julia Payne, additional reporting by Shadia
Nasralla; Editing by Elaine Hardcastle and Jan Harvey)
