Premier Oil and Harbour have reached agreement with Harbour’s UK operating company Chrysaor Holdings Ltd., regarding a proposed all share merger between Premier and Chrysaor and the reorganization of Premier’s existing debt and cross-currency swaps.
The reverse takeover would create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250,000 boe/d as of June 30 and combined 2P reserves of 717 MMboe as of December 2019, the companies said in an Oct. 6 release.
At close, Premier stakeholders would own up to 23% of the combined group and Harbour and other Chrysaor shareholders would own at least 77%. Premier’s shareholders are expected to own up to 5.45% of the combined group. Chrysaor’s largest shareholder, Harbour, is expected to own up to 39.02% of the combined group.
Premier’s $2.7 billion of total gross debt and certain hedging liabilities will be repaid and cancelled on completion. A cash payment of $1.23 billion will be made to financial creditors of Premier and its subsidiaries and Premier group’s cross-currency hedge counterparties; Premier’s $400 million of letters of credit will be refinanced, and existing creditors will also receive shares in the combined group.
The combine’s board of directors will comprise 11 directors including six independent non-executive directors and three executive directors including Linda Z. Cook (chief executive officer of Harbour), who will be chief executive officer of the combine; and Phil Kirk (chief executive officer of Chrysaor), who will be president of the combined and chief executive officer Europe. The two other non-executive directors will be appointed by Harbour.
The deal is subject, amongst other things, to regulatory, shareholder, and existing creditors’ approval.