Irish oil explorer Providence Resources shares to restart trading as it eyes $74m rights issue
Providence Resources is seeking to raise more than twice its market cap, and the Irish oil and gas explorer has also applied for its shares to restart trading tomorrow morning.
The firm wants to raise $74m (£50.5m) from a rights issue to new and existing investors, more than two times its market cap of £19.26m.
The cash will be used to pay for its recently concluded legal battle with drilling services firm Transocean, repay its outstanding debts, strengthen the company's balance sheet and fund drilling costs for an exploration well.
Providence has also applied for its shares, which have been suspended since mid-April, to start trading on London's Aim and Dublin's ESM market tomorrow morning.
Read more: Oil at $20 per barrel talk re-emerges
They were suspended in mid-April after an appeals court ruled Providence and its partner Lansdowne must pay up to $7m in fees to Transocean over a long-running dispute relating to an oilfield off the Irish coast.
Tony O'Reilly, chief executive of Providence Resources, said that the move will "completely restructure the company's balance sheet removing the financial instability brought about in part by the recent UK Court of Appeal ruling."
Read more: Oil industry to cut $1 trillion spending as North Sea hits "critical phase"
Most of the new shares will be issued at £0.12p per share, below the current level. An open offer will also let existing investors snap up shares at the discounted price.
It's subject to shareholder approval at an extraordinary general meeting due to take place on 14 July in Dublin.