Gulf Keystone Petroleum Ltd (LON:GKP) has today launched its open offer share sale to its existing shareholders.
Those shareholders are facing an imminent issue of equity that will practically dilute them out of sight, with them being reduced to 5% whilst new bondholder shares taking up the vast majority of the group’s share capital.
Nevertheless, the existing investor base could see their stake up to a maximum of 10% if they pony up to put fresh capital into the restructured business.
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Shareholders are entitled to buy twenty new Gulf Keystone shares for every nine existing shares they own. A total of 2.29bn new shares are being sold at a price of 0.8314p
The new shares are being sold at a (post restructuring) price of 0.8314p, and if fully taken up it will raise US$25mln of capital for Gulf Keystone.
Cash raised in the open offer is earmarked for investment in the Shaikan field, to pay for work necessary to maintain production volumes at 40,000 barrels of oil per day.
The open offer is conditional on the completion of the restructuring, and it is expected to close on September 15.