North Sea explorer Premier Oil has hired Rothschild bankers as the firm nears a deadline to pay back nearly £2bn in loans.
The Sunday Telegraph first reported that a number of hedge funds, including Asia Research and Capital Management (ARCM), have bought $90m debt from Premier backer Barclays in recent weeks.
ARCM has built a short position worth $130m, the largest in UK history against the oil firm, and controls about 17 per cent of the firm’s debt.
The move is seen as insurance against ARCM’s holding of Premier’s debt. According to analysis from Breakout Point, it is the largest such position in Europe.
Premier did not comment on the appointment, but is due to release a trading update on Thursday.
Last month the company responded to similar claims by tweeting that reports that the firm was under pressure from its lenders were “factually incorrect and misleading.”
It added that it “expects to conclude refinancing discussions in [the first quarter] of 2020”.
Premier Oil has sought to trim its massive debt, the legacy of a drawn-out restructuring process in 2017, throughout the year.
In August the firm announced it would sell its Zama field off the coast of Mexico, which was valued at $439m by Jefferies analysts.
Investors will be hoping for news regarding the sale in this week’s trading update.
In a trading update in November Premier announced that it had reduced its net debt by $300m in 2019, in line with its expectations for the year.
At the time, chief executive Tony Durrant commented: “We continue to deliver on our strategic priorities. We are generating significant free cash flow, which is materially deleveraging our balance sheet.”