Tullow Oil proposes $750m rights issue at 45% discountStaff Writer | March 17, 2017
Tullow Oil has announced plans to carry out a £607m ($750m) rights issue at a 45% discount to its last closing price as feels it is the "right time to get our balance sheet in order".
Oil exploration The 25-for-49 rights issue
Tullow, which also has been told by China's largest oil company that it will acquire the rest of Tullow Oil's interest in its Ugandan oil exploration licences, will issue shares at 130p in the 25-for-49 rights issue and expects to reap roughly £586m net of expenses, if shareholders give their approval.
At the end of last year, Tullow's net debt stood at $4.8bn, having increased 19% despite issuing $300m of convertible bonds, though the company moved into positive free cash flow and still had significant headroom from its bank facilites and free cash of $1.0bn.
COO Paul McDade, who takes over as chief executive in April said: "Tullow has taken a number of significant steps since 2014 to re-set and restructure the business to ensure the group is well positioned to meet the challenge of lower oil prices.
"As a result, we are now producing positive free cash flow and have begun the process of reducing our debt." ■