* 'We're done' with assets sales for now, says CEO
* Bond received $4.2 bln in investor interest
* New bond to simplify $2.4 bln debt structure
By Ron Bousso
LONDON, May 7 (Reuters) - Tullow Oil's $1.8 billion bond,
which was launched to help it manage a $2.4 billion debt pile,
drew more interest from investors than expected after the
Africa-focused producer's financial overhaul, the chief
executive said on Friday.
Rahul Dhir also told Reuters the firm did not plan to sell
more oil and gas fields after disposing of assets worth $750
million following last year's oil price plunge, including its
$575 million sale of a Uganda project stake to Total.
"No divestments are on the anvil, we think we're done with
that," said Dhir, who took up his post at the London-listed
company in July when oil prices had been hammered by the
pandemic.
The new bond, priced at a coupon of 10.25%, is expected to
complete on May 17, the firm announced on Thursday.
Signalling investor confidence in the company, the bond
received interest totalling $4.2 billion, Dhir said.
The bond will allow Tullow to pay down its reserve-based
lending facility with banks and its two bonds totalling $950
million which were set to be paid in July 2021 and in 2022.
But the new bond's 10.25% coupon is higher than the 6.625%
and 6.25% on its 2021 and 2022 bonds, which Berenberg analysts
said would add about $30 million to Tullow's annual interest
costs although they said would still help the company.
"This provides much needed breathing space to improve
operating performance and get the balance sheet in better
shape," Berenberg said in a note.
Tullow raised the prospect of a cash crunch in September
following the oil price collapse. Since then, it has reached an
agreement with banks to scale down its reserve-based loan,
taking its liquidity to around $900 million.
Tullow would have two bonds maturing in 2025 and 2026,
simplifying its debt structure, said Dhir.
Net debt will remain at $2.4 billion, with Tullow's market
capitalisation standing at 802 million pounds ($1.12 billion).
"The company has a tremendous amount of headroom to execute
its business plan," Dhir said.
Tullow reported an after-tax loss of $1.2 billion in 2020
after writing off exploration assets and other impairments. It
expects to produce 60,000-66,000 barrels per day (bpd) in 2021,
down from 74,900 bpd last year after asset sales.
($1 = 0.7187 pounds)
(Reporting by Ron Bousso; Editing by Edmund Blair)
Tullow Oil (TLW)
