Convertible Bond Offering

RNS Number : 6477J

Hurricane Energy PLC

29 June 2017

 

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, OR IN OR INTO CANADA, AUSTRALIA, SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

29 June 2017

Hurricane Energy plc

(the "Company")

Convertible Bond Offering

Hurricane Energy plc, the UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, today announces the launch of an offering (the "Offering") of U.S.$220 million of Convertible Bonds due 2022 (the "Bonds") with an over-allotment option of up to U.S.$10 million.

Concurrently with the Offering, a non-pre-emptive placing (subject to shareholder approval) of new ordinary shares in the capital of the Company to raise a minimum of U.S.$300 million will be undertaken by the Joint Bookrunners on behalf of the Company (the "Concurrent Equity Placement"). Further details of the Concurrent Equity Placement are contained in a separate announcement issued by the Company at or around the time of this Announcement.

The net proceeds of the Offering and the Concurrent Equity Placement will be used to fund capital expenditure in relation to the Early Production System development at the Company's Lancaster field, West of Shetland. The Company is currently targeting achieving first oil in the first half of 2019, and completing this financing now will enable the Company to maintain this target. Further details of the use of proceeds of the Offering and the Concurrent Equity Placement are set out in the Company's announcement of 29 June 2017.

The Bonds will be issued at par and will bear interest in the range of 7.00 - 7.50 per cent. per annum payable quarterly in arrear in equal instalments. The Bonds will be convertible into fully paid ordinary shares of the Company (the "Ordinary Shares") with the initial conversion price to be set at a premium in the range of 22.5 - 27.5 per cent. above the placing price of the Concurrent Equity Placement.

Upon conversion of the Bonds, the Company may elect to settle its obligations by way of delivery of ordinary shares, payment of a cash alternative amount (calculated by reference to the volume weighted average price of an Ordinary Share over of a specified period) or a combination of the two.

On the Closing Date (as defined below), the Company will transfer to an account secured in favour of U.S. Bank Trustees Limited as trustee in respect of the Bonds a sum equal to the full amount of the first eight interest payments on the Bonds, which can be released in certain circumstances as specified by the Terms and Conditions of the Bonds.

Unless previously converted, redeemed, or purchased and cancelled, the Bonds will be redeemed at par on the fifth anniversary of the Closing Date (as defined below).

The Company will have the option to redeem all, but not some only, of the outstanding Bonds:

·              at any time on or after the date falling 3 years and 21 days after the Closing Date at par plus accrued interest if the value of the Ordinary Shares underlying a Bond (calculated over a specified period) shall have been at least U.S.$300,000; and

·             at any time, if 85 per cent. or more of the aggregate Principal Amount of the Bonds originally issued shall have been previously converted, redeemed, or purchased and cancelled (the "Clean-up Call").

The final terms of the Bonds are expected to be announced on 30 June 2017, although they may be announced earlier, without further notice. Settlement and delivery of the Bonds is expected to take place on or about 24 July 2017 (the "Closing Date").

Settlement of the Bonds is conditional upon (i) approval of the shareholders of the Company of the resolutions to be proposed at a General Meeting of the Company to be held on or about 21 July 2017 in relation to the issue of new Ordinary Shares in connection with any conversion of the Bonds and the Concurrent Equity Placement and (ii) the admission to trading of any new Ordinary Shares issued in connection with the Concurrent Equity Placement on the London Stock Exchange's AIM.

It is intended that application will be made for the Bonds to be listed on The International Stock Exchange (or another recognised stock exchange) prior to the first interest payment date.

The Company and its subsidiaries have agreed to a lock-up undertaking for a period of 90 days from the pricing of the Bonds in respect of the Ordinary Shares (and equity-linked instruments in respect of the Ordinary Shares), subject to customary exceptions and excluding any Ordinary Shares issued pursuant to the Concurrent Equity Placement and Bonds issued pursuant to the over-allotment option.

Cenkos Securities plc and Stifel Nicolaus Europe Limited are acting as Joint Bookrunners.

The Bonds will be offered via an accelerated book building process (the "Bookbuild") through a private placement only to institutional investors outside the United States of America, Australia, Canada, South Africa and Japan. The Bookbuild is expected to close no later than 4.30 p.m. on 30 June 2017, but the Joint Bookrunners reserve the right to close the Bookbuild earlier, without further notice.

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 is not an offer to the public in any jurisdiction.

This announcement is released by Hurricane Energy plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing information relating to the Offering and the Bonds described above, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Contact Details:

Hurricane Energy plc	[phone]
Dr Robert Trice (Chief Executive Officer) / Alistair Stobie (Chief Financial Officer)
Cenkos Securities plc
Nominated Adviser: Nick Tulloch / Derrick Lee	[phone]
Joint Bookrunner: Stuart Galvin	[phone]
Stifel Nicolaus Europe Limited	[phone]
Joint Bookrunner: Michael Coakley / Christopher Thurn	[phone]
Evercore Partners International LLP	[phone]
Financial Adviser
Jim Renwick / Gent Kadare
Vigo Communications	[phone]
Public Relations Adviser	[e-mail]
Patrick d'Ancona / Ben Simons

DISCLAIMER

NO ACTION HAS BEEN TAKEN BY THE COMPANY, THE JOINT BOOKRUNNERS 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 BOOKRUNNERS TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, COLLECTIVELY THE UNITED STATES) OR IN CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN OR IN ANY JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW (EACH AN "EXCLUDED TERRITORY"). THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE FOR BONDS OR ORDINARY SHARES TO OR BY ANYONE IN THE UNITED STATES OR ANY EXCLUDED TERRITORY OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR INVITATION OR UNDERTAKE SUCH SOLICITATION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS. SUBJECT TO CERTAIN EXCEPTIONS, THE SECURITIES REFERRED TO HEREIN MAY NOT BE OFFERED OR SOLD IN ANY EXCLUDED TERRITORY OR TO, OR FOR THE ACCOUNT OR BENEFIT OF ANY NATIONAL RESIDENT OR CITIZEN OF ANY EXCLUDED TERRITORY. THE BONDS AND THE ORDINARY SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER ANY SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY OTHER STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE BONDS AND THE ORDINARY SHARES MAY NOT BE OFFERED, SOLD, RESOLD, TAKEN UP, TRANSFERRED, DELIVERED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, INTO OR WITHIN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER IN THE UNITED STATES. THE BONDS ARE ONLY BEING OFFERED OUTSIDE THE UNITED STATES IN OFFSHORE TRANSACTIONS WITHIN THE MEANING OF, AND IN RELIANCE ON, REGULATION S UNDER THE SECURITIES ACT. NO ACTION HAS BEEN TAKEN BY THE COMPANY OR BY THE JOINT BOOKRUNNERS THAT WOULD PERMIT AN OFFER OF THE BONDS OR THE ORDINARY SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT IN THE EXCLUDED TERRITORIES OR ANY OTHER JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. NO PUBLIC OFFERING OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IS BEING MADE IN ANY EXCLUDED TERRITORY OR ELSEWHERE.

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).

THE INFORMATION IN THIS ANNOUNCEMENT MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION, REPRODUCTION, OR DISCLOSURE OF THIS INFORMATION IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. STATEMENTS CONTAINED IN THIS ANNOUNCEMENT REGARDING PAST TRENDS OR ACTIVITIES SHOULD NOT BE TAKEN AS A REPRESENTATION THAT SUCH TRENDS OR ACTIVITIES WILL CONTINUE IN THE FUTURE.

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 BOOKRUNNERS 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 CLOSING 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 TO BE ISSUED OR TRANSFERRED AND DELIVERED UPON CONVERSION OF THE BONDS AND NOTIONALLY UNDERLYING THE BONDS (TOGETHER WITH THE BONDS, THE "SECURITIES"). NONE OF THE COMPANY OR THE JOINT BOOKRUNNERS MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.

THE JOINT BOOKRUNNERS 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 BOOKRUNNERS OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES.

EACH OF THE COMPANY, THE JOINT BOOKRUNNERS 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.

 

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