PMO.L Regulatory News (PMO)

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PREMIER OIL PLC

("Premier" or "the Group" or "the Company")

Refinancing update

1 March 2017

Agreement of Amended Terms to Convertible Bonds

Premier is pleased to announce that amended terms to its $245m convertible bonds have been agreed with all members of an ad hoc committee of convertible bondholders. These terms also have the approval of the Coordinating Committee of the RCF Group and representatives of the other Private Lenders.

The key amended terms are:

- Maturity date extended to 31 May 2022

- Interest rate to remain at 2.5%, to be paid, at the election of the company, either in new shares, or from the proceeds of sale of new shares or (subject to the terms of an intercreditor agreement between the Company and its other lenders) in cash

- Conversion price to be reset at a premium of 20% to the higher of the volume weighted average price of Premier's shares over the period from today to 22 March 2017 (inclusive) or 62 pence

- Equity warrants representing 3% of Premier's issued share capital (enlarged for the issue of equity warrants under the terms of the overall refinancing) at a price of 42.75 pence/share

- No cash amendment fee

- Issuer right to require conversion at the conversion price at any time after one year if the value of Premier's shares is at least 140% of the conversion price for 25 consecutive dealing days

All seven members of the ad hoc committee, representing 47% of the convertible bonds, have now locked up to the above terms. Following this announcement, convertible bondholders outside the ad hoc committee are encouraged to contact Moelis & Company, as financial advisers to the committee, in order to lock up to the terms in respect of their holding. The lock up to the convertible bond terms will become effective on completion of the Private Lender lock up process.

On locking up holders representing 50% of the convertible bonds, Premier will seek to implement the amendment of terms by way of extraordinary resolution at a meeting of convertible bondholders. All convertible bondholders will receive equity warrants if the extraordinary resolution is passed. In the event that the extraordinary resolution fails and Premier has to implement the amendments through an alternative mechanism, equity warrants will only be issued to convertible bondholders who have locked up prior to the meeting.

If holders of at least 50% of the convertible bonds do not lock up, Premier's intention is to implement amendments to the convertible bonds via an alternative mechanism and on terms that will be materially less advantageous for convertible bondholders than those set out above.

Deferral of Financial Covenant Test

Premier has received a monthly deferral in respect of the test of its financial covenants with the test for the 12 month period ending 28 February 2017 waived and replaced by a test for the 12 month period ending 31 March 2017.

The Private Lenders are in the process of locking up to the terms of the proposed refinancing. An outstanding item required for the Private Lenders to finalise formal credit approval was agreement to the amended terms of the convertible bonds. The status of the formal credit approval and lock up of the Private Lenders will be reported in conjunction with the Company's Annual Results Announcement on 9 March 2017.

Once the lock up with the Group's Private Lenders becomes effective, further monthly deferrals of the financial covenant test will no longer be required.