Gulf Keystone Petroleum Ltd (LON:GKP) has received a major boost from its investors who have fully backed the troubled Kurdistan oiler’s attempt at refinancing.
An US$25mln open offer of 2.29bn new shares at 0.831p each was oversubscribed and paves the way for a US$500m financial restructuring that will see existing shareholders diluted down to 5% with a huge debt-for–equity swap.
Complicating the issue is a takeover bid worth US$300mln from Norwegian firm DNO that is contingent on the financial restructuring being approved.
DNO is one of the biggest operators in the volatile region, owning 55% of the Tawke Field, which produces 120,000 barrels of crude a day.
Gulf Keystone shares have slumped to 2.15p from 16p this year as concerns have grown over its financial position with the slide in oil prices and problem in getting payments out of Kurdistan adding to its woes.
Debts currently are around US$600mln but teh financing will cut these to US$100mln once it goes ahead.
The group also have assets that may be worth as much as US$600-700mln according to one analyst.
Capital Group, a US-based fund and major shareholder already in Gulf Keystone, backed the open offer and was also said to be buying any shares not taken up.
How much of the open offer Capital acquired was not clear, though Gulf said the offer was oversubscribed and applications for excess entitlements were scaled back.