Providence places shares at a premium

When Irish oil and gas explorer Providence Resources decided it needed new funds it found no shortage of institutional investors willing to pay a premium price for its shares.

The company placed 13.15m new shares at 480p per share, a 5% premium on the pre-placing closing price, raising £63.1m.

The money will be used to repay a $40m bond which matures in July, which the group issued to fund a bigger stake in the just completed Barryroe drilling programme, offshore Ireland. Providence's stake will be boosted from 50% to 80%.

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Funds will also be used to finance the firm's other ongoing drilling campaigns.

Commenting on the fund raising exercise, Tony O'Reilly, Chief Executive of Providence, said the placing would simplify the balance sheet by enabling the bond redemption while releasing cash flow currently being sucked up by interest payments.

Providence shares had gained 7% by 11:54.

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