Premier Oil creditors approve merger with Chrysaor

LONDON (Reuters) - A sufficient number of creditors of indebted Premier Oil PMO.L have approved a proposed merger with private equity backed Chrysaor to create the British North Sea's biggest oil and gas producer, Premier said on Tuesday.

The reverse takeover, which will see Premier’s creditors paid $1.23 billion in cash, will fold one of the world’s oldest independent producers into a private equity-backed group in which Premier shareholders will receive an expected 5.45% stake.

Premier had $1.9 billion in net debt.

“(Premier) has received the requisite level of support from each class of its creditors for the proposed merger of Premier and Chrysaor Holdings Limited and the reorganisation of Premier’s existing finance arrangements,” it said.

“Premier will launch the restructuring plan processes through... 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 complete by the end of Q1 2021.”

Premier shares were up 9% at 0923 GMT at 12.48 pence.

Chrysaor’s largest shareholder, Harbour Energy, is expected to own just over 39% of the merged company, which will stay listed on the London Stock Exchange.

The two groups combined will produce around 270,000 barrels of oil equivalent per day, topping majors such as BP BP.L in the basin.

Reporting by Shadia Nasralla; Editing by Kirsten Donovan