Premier Oil gets support from creditors for Chrysaor merger
UK oil and gas company Premier Oil has received support from creditors for the proposed merger with Chrysaor announced in October.
Premier Oil on 6 October 2020 reached an agreement with Harbour’s UK operating company Chrysaor regarding a proposed all-share merger between Premier and Chrysaor and the reorganisation of Premier’s existing debt and cross-currency swaps.
The deal is supposed to create the largest independent oil and gas company listed on the London Stock Exchange with a combined production of over 250 kboepd.
The merger is subject to regulatory approvals and approval by Premier’s shareholders and the existing creditors.
Further to the announcement in October, Premier said on Tuesday that it has received the requisite level of support from each class of its creditors for the proposed merger of Premier and Chrysaor and the reorganisation of Premier’s existing finance arrangements with those creditors entering into a binding support letter.
Under the support letter, the creditors have, among other things, irrevocably undertaken to vote in favour of the court-approved restructuring plans, and have agreed to waive Premier’s financial covenants until completion of the transaction.
As such, the merger agreement between Premier, Harbour, funds managed by EIG and Chrysaor has been released from escrow.
Premier said it will launch the restructuring plan processes through the issuance of a practice statement letter, immediately after the prospectus for the transaction is published, which is currently anticipated by the end of 2020.
The transaction is expected to result in Premier’s stakeholders owning up to 23 per cent of the combined group and Harbour and other Chrysaor shareholders owning at least 77 per cent.
It is expected to complete by the end of the first quarter of 2021.
The merger will result in a combined group with significant scale and diversification, through the combination of material operated and non-operated cash generative production hubs in the UK North Sea.