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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Premier Oil is locked in battle with its largest creditor, Asia Research and Capital Management (ARCM) over the London-listed oil company's plans to acquire further assets in the ageing UK North Sea and extend debt maturity.
ARCM says the plans will jeopardise Premier's ability to service debt and letter of credit (L/C) obligations due in May 2021.
Deeply concerned
As the company's largest creditor, holding more than 15 per cent across the company's debt instruments, ARCM says it will take all steps to oppose Premier's proposal and will vigorously contest any attempt to implement such proposal via a scheme of arrangement.
The Hong Kong based hedge fund says it is deeply concerned about the company's plans to pursue acquisitions and that its balance sheet is already highly levered.
Pending maturity
Premier is facing an impending May 2021 maturity of US$2.55 billion of net debt comprising of US$2.2 billion of "accounting net debt" and US$371 million of L/Cs.
ARCM believes that management's immediate focus should be on transactions that facilitate a significant deleveraging of the company's balance sheet.
This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.