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Hedge fund ARCM to sell $200 mln of Premier Oil debt -sources

Mon, 21st Sep 2020 13:04

By Clara Denina

LONDON, Sept 21 (Reuters) - Premier Oil's biggest
lender, hedge fund Asia Research and Capital Management (ARCM),
plans to auction $200 million of the energy producer's debt
ahead of a $530 million equity raise by the company, three
sources told Reuters.

ARCM, which holds more than 15% of Premier's debt
instruments, would retain about $240 million of the company's
debt if the auction succeeds. The bid deadline is set for
Friday, one of the sources said.

With net debt of close to $2 billion, Premier is
seeking $530 million in fresh equity and needs at
least $325 million for its creditors to extend current debt
maturities.

A source with knowledge of the matter told Reuters on Friday
that the company had received indicative, non-binding support in
excess of a targeted $325 million for the capital increase.

Premier is also negotiating with North Sea producer Chrysaor
as an alternative to the capital increase.

The Chrysaor talks have not touched on the possibility of
Chrysaor acquiring Premier, sources have told Reuters
previously, adding that it would not engage in such talks while
Premier remains saddled with current debt levels.

ARCM is looking to sell some of the debt because of concerns
about Premier's ability to restructure, one of the sources said.

It is uncertain whether the hedge fund will find buyers for
the debt while the company is looking to raise cash, a second
source said.

Premier Oil and ARCM declined to comment.

The energy company's debt is currently valued at 68 cents on
the dollar and ARCM aims to sell at 72 cents, two of the sources
said.

Its market capitalisation is a little less than 171 million
pounds ($219.8 million).

Premier only recently resolved a debt dispute with ARCM
after the price for a planned acquisition of some of oil major
BP's North Sea assets was revised down.
($1 = 0.7780 pounds)
(Reporting by Clara Denina
Additional reporting by Shadia Nasralla and Ron Bousso
Editing by David Goodman)

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