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%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
BS
-
Barclays begins paying up to £100 compensation to customers after banking outageBarclays will pay up to £7.5 million in compensation to customers after its banking services were disrupted by an IT outage
-
Review: Shangri-La Paris – an ode to the world’s best foodNatasha Langan enjoys fine French and Chinese cuisine at the Shangri-La Paris
