Hurricane Energy Plc (LON:HUR) has decided to sideline plans to raise a further US$$5mln of capital via an offer to shareholders.
The UK offshore oiler had intended to give existing shareholders the opportunity to invest at the same price as the investors that got involved in the company via its recent US$530mln funding, allowing long term holders to manage the dilution somewhat.
READ: Hurricane Energy set to bank another US$10mln with issue of extra bonds
However, as the market price for Hurricane’s shares is below the placing price, the company has decided that the proposal doesn’t presently make sense.
“The directors do not believe it is a productive use of company funds or management time to proceed with the pre-emptive offer should the company's shares continue to trade below the offer price,” Hurricane said in a statement.
“Therefore, should the volume weighted average price of the company's shares remain at or below the offer price over the 5 trading days from the date of this announcement, no pre-emptive offer will be pursued.”
In London, Hurricane shares closed Tuesday trading at 29.5p.
The recent funding, announced in June and closed in July, saw some US$300mln of equity raised at a price of 32p as well as US$230mln of convertible bonds.