IRISH oil and gas explorer Petroceltic will tap shareholders and several new investors for £81m to fund projects in Algeria and Italy.
The dual Dublin and Aim-listed company announced a share placing at 12.75p per share yesterday, a modest discount to Friday’s closing price of 13p. Although the sum being raised is almost half the company’s market capitalisation, the order book is understood to have been nearly two times oversubscribed.
The funds will be used to assess discoveries made in North Africa as the Algerian government is close to granting Petroceltic a two-year extension to its licence in the region. They will also go towards drilling a second well on the Elsa oilfield in Italian waters.
Petroceltic chief executive Brian O’Cathain said the company planned six well drilling projects in the second half of this year, including an onshore site in Tunisia. “We are particularly pleased the placing was oversubscribed, given difficult market conditions,” he added.
Sources said Petroceltic’s top 10 shareholders, including BlackRock and Schroders, backed the placing. New investors include billionaire George Soros and Scottish Widows.
Long-term shareholders are understood to have been unsurprised by the need to raise more capital after Iberdrola, the Spanish electricity and gas operator, sold its 15.7 per cent stake in the company early this year.
DAVY CORPORATE FINANCE
FITTINGLY for a company listed in its own market and abroad, Petroceltic hired advisers from Dublin and overseas. Peter Krens led the team at Mirabaud, the 191-year old Swiss private bank that has over the years turned its hand to a range of services including corporate finance.
Representing Petroceltic’s home turf was Davy, Ireland’s largest securities firm. Heading up Davy’s team was Hugh McCutcheon, an experienced banker who has worked for Davy since 1981 apart from a brief spell with ABN Amro’s Irish division at the turn of the millennium.
McCutcheon has worked on high-profile transactions including the reverse takeover of educational software maker Riverdeep, the demerger of glass manufacturer Ardagh and Independent News & Media’s €94m rights issue in December.
He was supported by Davy director John Frain, whose CV also includes a stint at ABN Amro, along with PricewaterhouseCoopers.
Sources close to the Petroceltic placing told City A.M. the process was relatively straightforward given the company’s strong support from institutional backers. Many of the firm’s competitors have raised capital to grow recently and management is understood to have sold its story well.