Premier Oil has announced that it had received the ‘requisite level of support’ from its creditors for the proposed all-share merger with Harbour Energy’s UK operating company Chrysaor.
Premier Oil has also received approval for the reorganisation of its ‘existing finance arrangements with those creditors entering into a binding support letter’.
Last month, Premier Oil signed an agreement with Chrysaor regarding the proposed merger.
The deal is expected to create the largest independent oil and gas company listed on the London Stock Exchange (LSE), with combined production of over 250,000 barrels of oil equivalent per day (boepd).
Premier Oil said in a statement: “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.
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“As such, the merger agreement between Premier, Harbour, funds managed by EIG and Chrysaor has been released from escrow.”
The reverse takeover deal will ensure that Premier’s creditors are paid $1.23bn in cash.
Premier Oil noted that the transaction is expected to be completed in the first quarter of next year.
Chrysaor shareholders will have at least a 77% ownership with Premier shareholders, taking up to 5.45% of the combined group. Other Premier stakeholders will make up the rest of the ownership.
Harbour Energy, Chrysaor’s largest shareholder, will own approximately 39% of the combined entity.