ONE of Premier Oil’s top creditors, Deutsche Bank, on Friday publicly backed the company’s contested debt extension plan ahead of a high stakes clash with a hedge fund opposed to the proposal.
The German banking giant said a proposal to extend Premier’s debt repayments by two years had its “full support,” setting up a clash with the oiler’s largest lender ARCM, which is fighting the extension proposal.
Premier wants to move the repayment date of its $2.7 billion debt pile from 2021 to 2023 so it can buy gas fields in the North Sea. It said 40 out of its 41 lenders back the plan.
Hong Kong-based ARCM is fighting the extension proposal over fears the takeover will cripple the FTSE 250 firms ability to repay its debt. ARCM also has a giant short position in Premier.
A judge yesterday scheduled a court showdown in March to decide the issue.
Some of Premier’s creditors have been exiting their positions ahead of the debt battle.
US giant Prudential Financial, the second largest lender, is understood to have put its entire $160 million stake up for auction last month.
One source said $20 million had been sold and another claimed that Prudential had sold out completely. It declined to comment.
Barclays, another top lender, sold $90 million last month.