Oil exploring firm Tullow Oil plc, which operates the jubilee oil fields in Ghana together with other partners, has announced the final pricing terms of its offering of $300 million of Convertible Bonds due 2021.
The proposed Convertible Bond Offering will further diversify Tullow Oil’s sources of funding and the proceeds will be used for general corporate purposes and to fund capital investment in the Group’s assets in West and East Africa.
The Bonds are issued at par and will have a coupon of 6.625% per annum payable semi-annually in arrears on 12th January and 12th July in each year, with the first interest payment date being 12th January 2017.
Tullow Oil, in a statement, said the Bonds will be convertible into fully paid ordinary shares of the Company.
The initial conversion price has been set at $3.52, a premium of 30% above the volume weighted average price of an Ordinary Share on the London Stock Exchange between opening and closing of the market on 6th July 2016, converted at the prevailing USD: GBP spot rate.
The Africa-focused oil explorer, said the Ordinary Shares underlying the Bonds represent 9.35% of the Company’s outstanding ordinary share capital.
Settlement is expected to take place on or about 12th July 2016. Mr. Ian Springett, Chief Financial Officer of Tullow Oil commented: “We are very pleased with the result of this bond offer which reflects the confidence that the market has shown in the Group’s business and financing strategy. The high level of demand has enabled us to strengthen our liquidity position and diversify our sources of capital.”
It is intended that an application will be made for the Bonds to be listed on a recognised stock exchange (as such term is defined in section 1005 of the Income Tax Act 2007) prior to the first interest payment date (expected to be 12th January 2017) – expected to be the Channel Islands Stock Exchange.
Barclays Bank PLC and BNP Paribas are acting as Joint Global Coordinators and Joint Bookrunners. Crédit Agricole CIB, J.P. Morgan, Natixis and Société Générale Corporate & Investment Banking are acting as Joint Bookrunners (together with the Joint Global Coordinators, the “Joint Bookrunners”).
ABN AMRO, BofA Merrill Lynch, DNB Markets, ING, Lloyds Bank, Nedbank Limited, London Branch, SMBC Nikko, Standard Chartered Bank and The Standard Bank of South Africa Limited are acting as Co-Lead Managers for the Offering.