The Federal Commission for Economic Competition (Cofece) authorized the merger between Premier Oil PLC (Premier) and Harbor North Sea Holdings, LID (HNSH).
At the beginning, on November 17, 2020, Premier and HNSH notified Cofece of their intention to carry out a concentration, in accordance with the provisions of article 90 of the Federal Law on Economic Competition (LFCE).
Then, on January 11, 2021, EIG Swift Co-Investment LP (EIG LP) adhered to the notification procedure for that concentration.
The notified transaction consists of the acquisition by Premier of the shares representing the capital stock of Chrysaor Holdings Limited (Chrysaor), as well as the acquisition of Premier shares by the Chrysaor Shareholders, as consideration for the sale of the shares of Chrysaor.
As a result of the notified transaction, Chrysaor will be a subsidiary of Premier, while Chrysaor shareholders will be new shareholders in Premier’s capital stock, and will indirectly participate in the capital stock of certain Mexican subsidiaries.
On October 6, 2020, the proposed merger of Premier and Chrysaor and the reorganization of Premier’s existing financial arrangements were publicly announced.
The merger of Premier and Chrysaor will create Harbor Energy plc, the largest independent oil and gas company listed on the London Stock Exchange with a combined output of more than 200 kboepd.
Upon completion of the transaction, existing Premier creditors will receive a $ 1.23 billion cash payment in satisfaction of part of Premier’s existing debt and cross currency swaps and Premier will issue new shares to existing creditors to satisfy the balance. of the Group’s existing debt and cross currency swaps.
In addition, existing creditors will receive new shares in Harbor and/or a cash alternative capped at $ 175 million.
As a result, the merger is expected to result in Premier’s stakeholders owning up to 23% of the expanded group and Chrysaor’s existing shareholders owning at least 77 percent.
Premier’s stakeholders include its existing shareholders, who are expected to own 5% of the expanded pool.
The expanded group will have significant scale and diversification, through the combination of non-operated and material operated cash generating production centers in the UK North Sea.
The merger will also generate substantial cost and tax synergies, accelerating the use of Premier’s approximately $ 4.1 billion UK tax losses and unlocking significant shareholder value.