Mittal-backed oil explorer Ophir taps shareholders with £550m rights issue

Elizabeth Fournier
FTSE 250-listed oil and gas explorer Ophir Energy last night revealed plans to tap shareholders to the tune of more than half a billion pounds to help fund new African drilling projects.

In a late announcement to the stock exchange, Ophir unveiled a £553m placing and rights issue, the proceeds of which it plans to use to ramp up its drilling projects across eastern Africa and expand its portfolio in the region.

The firm counts steel billionaire Lakshmi Mittal among its backers, although just last month Mittal sold down his stake.

As recently as yesterday Ophir had been mooted as a potential takeover target, having highlighted a potential shortfall in funds for future exploration.

Ophir also released its preliminary results for the year to 31 December last night, revealing its post-tax loss had increased to $47m (£31.1m) from $19.1m the previous year as administrative costs – which include directors pay and share option incentive costs – more than doubled.

The group also highlighted its successful exploration joint venture with BG Group in Tanzania, and its dominant position in the east African market.

Ophir plans to place 19.8m shares at 460p each and issue up to 168m new shares priced at 275p, a 32.5 per cent discount to the trading price.

The rights issue is fully underwritten by JP Morgan Cazenove as sponsor and bookrunner, Credit Suisse and Deutsche Bank as joint bookrunners and RBC Capital Markets and Oriel Securities as joint lead managers. Merlin Partners provided financial advice.