By John Lee.
The Telegraph reports that an encouraging update on its fund-raising plans provided some much needed cheer for Gulf Keystone Petroleum (GKP) on the stock market. The Kurdistan-focused oil producer had slumped in recent weeks, amid speculation that the company’s key bond sale was running into trouble.
The company announced last month that it was meeting fixed income investors with a view to raising as much as $250 million from a bond sale to help it boost production at the Shaikan field.
However, the group caused alarm and its shares dropped sharply when it revealed a day later that, without the fund-raising, it was at risk of running out of cash by the end of next month.
Rumours that the international roadshow for the debt offering had encountered difficulties, as well as pressure from short-sellers, served to drag the shares even lower in the days that followed.
There was relief, then, when the company revealed late on Friday that the roadshow had finished and that the group would go-ahead with a private placement, which would include the sale of warrants linked to as many as 40m shares. As a result, GKP gained 8.2 percent on Monday, before giving up some of that gain on Tuesday.
(Source: Telegraph, Yahoo!)