U.S. Markets open in 2 hrs 33 mins

Premier Oil Gets Court Approval to Push Ahead With Debt Plan

Rodney Jefferson and Luca Casiraghi

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.

U.K.-based energy explorer Premier Oil Plc can move ahead with its plan to extend debt maturities and buy gas fields in the North Sea, a Scottish court ruled on Thursday.

Judge Sarah Wolffe ruled the company can proceed to a creditor vote on a proposed change in terms on $2 billion-worth of debt, heading off a challenge by Premier Oil’s largest creditor, Asia Research & Capital Management.

The decision clears the first hurdle for Premier Oil, which now needs to achieve at least 75% of support from each creditor class in order to proceed. ARCM had sought to delay the timetable proposed by the company for the scheme of arrangement, claiming it was “ambushed” by Premier Oil and had insufficient time to respond, Wolffe said.

“I have a degree of sympathy with the position ARCM finds itself in,” Wolffe said.

The plan will now be put to a creditor vote next on Feb. 12 with a second court hearing in March, the company said in a statement. The judge agreed on the timetable proposed by the company, but reserved the right to review how the creditor vote is structured.

Premier Oil said on Thursday it has 86% support from its super-senior debt holders and more than 75% backing from senior lenders for its proposal. But ARCM --which has more than 15% of the debt-- could successfully block it if the vote is divided into more sub-groups. The fund also disclosed a 17% short position on the company’s stock last year.

Premier Oil’s shares jumped after the ruling to trade more than 2% higher, before easing back to a 1.7% gain at around 115.9 pence by 11:35 a.m. in London.

The gas exploration company wants to extend debt maturities to November 2023 and expand in the North Sea. Last week it announced a $500 million capital increase to fund the purchase of North Sea gas fields from BP Plc and Dana Petroleum Plc.

(Updates to add company statement in fifth and sixth paragraphs.)

--With assistance from Antonio Vanuzzo, David Hellier and Laura Hurst.

To contact the reporters on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net;Luca Casiraghi in London at lcasiraghi@bloomberg.net

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Chris Vellacott

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.