RE: reply from pmo24 Aug 2020 22:35
Just checked my emails and I actually did get the same copy and paste with a little extra.:
Dear Mr Ramsay ( Gordan Ramsay, that’s why I swear so much )
We need to have formally agreed the terms of the refinancing before we can launch and price the equity raise. Shareholders would not be willing to put in new money before they have certainty on the refinancing terms nor would we feel comfortable putting that equity at risk without firm plans on the refinancing.
The refinancing, together with the BP Acquisitions, resets our balance sheet and removes the debt overhang on the business. It allows us time to benefit from strongly rising production and additional free cash flow which will materially deleverage our balance sheet - at $65/bbl long term, our net debt will be less than $400m by the end of 2024; at $55/b LT, our net debt would be c. $1bn. It also gives us time (4.5 years) to benefit from recovering oil prices and to exploit the oil and gas we have in the ground.
Our major shareholders who we spoke with before the announcement were (and remain) supportive. We have also spoken to other shareholders and new investors since. All have been supportive of the plans we have laid out. There has been, we are told, no change in short activity. We do not know of any institutional sellers and, in fact, know where in a couple of instances institutions have increased their position.
We anticipate that the equity raise will be fully underwritten when launched and, while the exact split between placing and open offer is still to be determined, there will be a very sizeable pre-emptive component available to all shareholders to minimise dilution. The placing and open offer will be done at the same price.
There is no denying that the size of the equity raise relative to market cap together with the fact that we were unable to price the equity did result in a very ugly share price reaction. However, the marketing will continue this week and into September and we are hopeful that we will see buying interest in the stock pick up again.
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