Convertible Bond Offering

RNS Number : 3426D

Tullow Oil PLC

06 July 2016

 

6th July 2016  

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933), OR IN OR INTO CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Tullow Oil plc Convertible Bond Offering

Tullow Oil plc (the "Group", the "Company" or "Tullow Oil") today announces the launch of an offering (the "Offering") of $300 million of Convertible Bonds due 2021 (the "Bonds").

The proposed Convertible Bond Offering will further diversify Tullow Oil's sources of funding and the proceeds will be used for general corporate purposes and to fund capital investment in the Group's assets in West and East Africa.

Ian Springett, Chief Financial Officer of Tullow Oil commented: "The proposed Convertible Bond issue will further diversify Tullow Oil's sources of funding and give the company access to a new investor base. As per our most recent trading statement, our focus will continue to be on strengthening the balance sheet and deleveraging the business."

The Bonds will be issued by Tullow Oil (Jersey) Ltd (the "Issuer"), a directly wholly-owned subsidiary of the Company incorporated in Jersey but tax resident in the UK, and will be guaranteed by the Company and certain subsidiaries of the Company. The Bonds will have the benefit of a senior and unsecured guarantee by the Company which will rank pari passu in right of payment with all of the Company's existing and future unsecured and unsubordinated obligations. The subsidiary guarantees will be joint and several and subordinated to the existing and future senior obligations of the relevant subsidiary guarantors. In certain circumstances such subsidiary guarantor may be released from their obligations in respect of the Bonds by the Company and certain other subsidiaries of Tullow Oil may be required to grant subordinated guarantees which shall also be subordinated to the existing and future obligations of the relevant subsidiary.

The Bonds will be issued at par and are expected to carry a coupon of between 5.875% and 6.625% per annum payable semi-annually in arrear on 12^th January and 12^th July in each year, with the first interest payment date being 12^th January 2017. The Bonds will be convertible into fully paid ordinary shares of the Company (the "Ordinary Shares"). The initial conversion price is expected to be set at a premium of between 30% and 35% above the volume weighted average price (the "VWAP") of an Ordinary Share on the London Stock Exchange between opening and closing of the market on 6^th July 2016, converted at the prevailing USD:GBP spot rate.

Unless previously converted or redeemed, or purchased and cancelled, the Bonds will be redeemed at par on 12^th July 2021.

The Issuer will have the option to call all outstanding Bonds on or after 29^th July 2019 (the "Early Redemption Date") at par plus accrued interest if the VWAP of an Ordinary Share underlying a Bond (converted at the prevailing USD:GBP spot rate) equals or exceeds 130% of the conversion price for at least 20 dealing days in a period of 30 consecutive dealing days or, at any time, if 15% or less of the principal amount of the Bonds remains outstanding.  

If, following the release of one or more subordinated guarantors by the Company, there are no subordinated guarantors for the time being, the holder of each Bond will have the right to require the Issuer to redeem that Bond at its principal amount together with accrued and unpaid interest to such redemption date.

The final terms of the Bonds are expected to be announced later today.

Settlement and delivery of the Bonds is expected to take place on or about 12^th July 2016 (the "Settlement Date").

It is intended that an application will be made for the Bonds to be listed on a recognised stock exchange (as such term is defined in section 1005 of the Income Tax Act 2007) prior to the first interest payment date (expected to be 12^th January 2017) - expected to be the Channel Islands Stock Exchange.

In the context of the Offering, the Issuer and the Company will agree to a lock-up for a period commencing on pricing and ending 90 calendar days following the Pricing Date, subject to certain exceptions.

Barclays Bank PLC and BNP Paribas are acting as Joint Global Coordinators and Joint Bookrunners (the "Joint Global Coordinators").

The Bonds will be offered via an accelerated book building process through a private placement only to institutional investors outside the United States of America, Australia, Canada and Japan. No prospectus, offering circular or similar document will be prepared in respect of the Offering of the Bonds.

This press release does not constitute or form part of any offer or solicitation to purchase or subscribe for or to sell securities and the Offering of the Bonds is not an offer to the public in any jurisdiction.

FOR FURTHER INFORMATION CONTACT:

Tullow Oil plc ([phone])

Chris Perry - Investor Relations

James Arnold - Investor Relations

George Cazenove - Media Relations

About Tullow Oil plc

Tullow Oil is a leading independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW). The Group has interests in over 120 exploration and production licences across 22 countries which are managed as three Business Delivery Teams: West Africa, East Africa and New Ventures. 

For further information please refer to our website at www.TullowOil.com

Follow Tullow Oil on: Twitter: www.twitter.com/TullowOilplc

You Tube: www.youtube.com/TullowOilplc

Facebook: www.facebook.com/TullowOilplc

LinkedIn: www.linkedin.com/company/TullowOil

DISCLAIMER

NO ACTION HAS BEEN TAKEN BY THE COMPANY, THE JOINT GLOBAL COORDINATORS OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE BONDS OR POSSESSION OR DISTRIBUTION OF THIS PRESS RELEASE OR ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE BONDS IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS PRESS RELEASE COMES ARE REQUIRED BY THE COMPANY AND THE JOINT GLOBAL COORDINATORS TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT")). THIS PRESS RELEASE IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL.

THIS PRESS RELEASE AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED TO, AND DIRECTED IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"). FOR THESE PURPOSES, THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC, AS AMENDED.

IN ADDITION, IN THE UNITED KINGDOM THIS PRESS RELEASE IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS PRESS RELEASE MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA OTHER THAN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PRESS RELEASE RELATES IS AVAILABLE ONLY TO (A) RELEVANT PERSONS IN THE UNITED KINGDOM AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS IN THE UNITED KINGDOM AND (B) QUALIFIED INVESTORS IN MEMBER STATES OF THE EEA (OTHER THAN THE UNITED KINGDOM).

ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE COMPANY'S PUBLICLY AVAILABLE INFORMATION. NEITHER THE JOINT GLOBAL COORDINATORS NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS PRESS RELEASE OR THE COMPANY'S PUBLICLY AVAILABLE INFORMATION. THE INFORMATION CONTAINED IN THIS PRESS RELEASE IS SUBJECT TO CHANGE IN ITS ENTIRETY WITHOUT NOTICE UP TO THE SETTLEMENT DATE.

EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE BONDS OR THE ORDINARY SHARES NOTIONALLY UNDERLYING THE BONDS (TOGETHER WITH THE BONDS, THE "SECURITIES"). NEITHER THE COMPANY NOR THE JOINT GLOBAL COORDINATORS MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE BONDS FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE BONDS OR (III) THE FUTURE PERFORMANCE OF THE BONDS EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.

THE JOINT GLOBAL COORDINATORS ARE ACTING ON BEHALF OF THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE JOINT GLOBAL COORDINATORS OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES.

THIS PRESS RELEASE INCLUDES STATEMENTS THAT MAY BE CONSIDERED 'FORWARD LOOKING STATEMENTS'.  BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRCUMSTANCES THAT MAY OR MAY NOT OCCUR IN THE FUTURE. EACH OF THE COMPANY, THE JOINT GLOBAL COORDINATORS AND THEIR RESPECTIVE AFFILIATES EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY STATEMENT CONTAINED IN THIS PRESS RELEASE WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.

 

END

 

 

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