(Adds background, detail)
Sept 15 (Reuters) - Premier Oil Plc said on Tuesday
it was in talks with private-equity backed oil producer Chrysaor
and several other parties on alternative deals to secure
long-term debt refinancing.
Premier said last month it was seeking $530 million in fresh
equity, of which existing creditors said they would underwrite
$205 million in a potential debt-for-equity swap.
The company, with market capitalisation of around 162
million pounds ($209 million) on Tuesday and net debt of just
under $2 billion, needs at least $325 million in new equity for
its creditors to extend current maturities.
Premier said it was discussing alternative means of
refinancing in the best interests of its stakeholders, but that
there was no certainty of an agreement.
The Chrysaor talks have not touched on the possibility of
Chrysaor acquiring Premier, according to banking sources close
to the process.
The two sides have focused on a solution that would involved
a debt-for-equity swap aimed at reducing Premier's debt, the
sources said, without giving further details.
"To date, terms of the transactions discussed do not, in
Premier's opinion, provide better outcomes for either its
shareholders or creditors than those proposed under the heads of
terms announced on 20 August 2020," the company said.
Sources said Premier and its bond holders had sought a new
cornerstone investor or prepaid sales deal before the August
announcement, but sealed no agreement.
Premier declined to comment beyond its statement.
Another potential source of cash, the possible sale of its
stake in the Mexican Zama field, stalled earlier this year.
Around $230 million of any fresh cash is earmarked to buy
North Sea oil fields from BP which will help push up
Premier's output to 100,000 barrel of oil equivalent per day
from currently around 67,000 boe/d.
That portion of the raise has received a positive
shareholder response, sources with knowledge of the matter said.
Premier has appointed investment bank RBC for the process,
the sources added.
Premier's creditors, via financial advisor Lazard, tried to
attract investment from at least one private equity firm but
reached no deal, two sources with knowledge of the matter said.
At the same time it held talks, including with trading
houses such as Vitol, for a loan in exchange for crude oil or a
stake in the company, two other sources said.
In June, Premier reached an agreement with activist investor
ARCM which involved ARCM buying new equity at a discount of
around 9.6% to the volume-weighted average price over the
previous five days.
Premier generates cash once the oil price is above $37 a
barrel. It needs to get at least 75% of its creditors on board,
up from a current level of 45%, to proceed with its plans.
(Reporting by Tanishaa Nadkar in Bengaluru, Clara Denina, Ron
Bousso, Shadia Nasralla in London; Editing by Ramakrishnan M.
and Jan Harvey)
BP (BP.)