Santos raises AUD 1.17 billion, shares drop

Australian LNG player Santos said Thursday it has raised AU$1.17 billion from an institutional entitlement offer as the company tries to plug the debt holes caused by low oil prices.

“The institutional component of the entitlement offer had strong support from Santos shareholders, with approximately 86% of entitlements available to eligible institutional shareholders taken up,” Santos said in the statement.

The offer shortfall bookbuild attracted “strong demand” from both existing Santos shareholders and other institutional investors, clearing at $4.60 which represents a premium of $0.75 above the offer price of $3.85, according to the statement.

The retail component of the company’s planned $2.5 billion offer is expected to raise $1.35 billion and opens on Tuesday,  November 17.

“The successful uptake of the institutional entitlement offer is a clear sign of confidence in the package of capital initiatives Santos announced this week to strengthen our balance sheet and restore long term value for shareholders,” Santos’ Executive Chairman, Peter Coates said.

Santos share price plunged 27 percent after the institutional entitlement offer announcement. The share price dropped to $4.30, from the last close of $5.91 on Friday.

The company’s shares were halted all week since Santos on Monday launched a $3.5 billion package of measures to cut debt caused by low oil prices.

LNG World News Staff; Image: Santos