HERITAGE Oil, the British oil exploration firm gearing up for a $370m (£236m) right issue, fell 8.5 per cent yesterday as doubts remained over whether chief executive Tony Buckingham would dilute his share in the firm.
The company’s shares were the biggest faller on the FTSE 250 yesterday after spiking 44 per cent on Tuesday and Wednesday.
Buckingham, a former security adviser who owns 33 per cent of the firm, has not yet disclosed whether he will take up his rights entirely or dilute his share.
A person familiar with the situation said: “There’s no indication at the moment – he’s still to decide. He would be required if he followed his rights entirely to stump up $123m that’s a substantial amount.”
Buckingham is required as a minimum to undertake a “tail swallow” – selling a portion of his rights to buy the new issue without putting any extra cash in – which will dilute his ownership.
Heritage will raise the funds to purchase oil assets in Nigeria.