2015 Strategic Review

Strategic Review completed: $3.5 billion capital initiatives strengthen balance sheet

 

Key Points

1. $3.5 billion reduction of net debt through:

  • $520 million from sale of interest in Kipper gas field to Mitsui E&P Australia Pty Ltd
  • $500 million private placement at a 15% premium to last close to an affiliate of the China-based international private equity firm, Hony Capital
  • $2.5 billion fully underwritten accelerated pro-rata renounceable Entitlement Offer with retail entitlements trading

2. Significant liquidity position increasing to over $5 billion in cash and undrawn facilities

3. New dividend framework

4. Future operating strategy to be driven by priority for improved return on capital performance


Santos has announced the completion of its strategic review with $3.5 billion of capital initiatives to strengthen the Company’s balance sheet.

The initiatives being implemented complete the strategic review commenced in August this year, under the leadership of Executive Chairman, Peter Coates.

Mr Coates said: “The $3.5 billion of capital initiatives reinforce the Santos balance sheet and mark a significant step towards restoring long term value for shareholders.”

“The review has shown that we can further streamline the business and enhance financial discipline and the Board is absolutely committed to pursuing those opportunities.

“We are very confident that the steps taken today will drive better returns for shareholders by strengthening the company’s financial position and underscoring the value of its high quality and diverse asset base.

The Institutional Entitlement Offer closed on Wednesday, 11 November 2015 and Eligible Institutional Shareholders exercised approximately 86% of their entitlements with unexercised entitlements acquired by other Institutional Investors, which in total raised approximately $1.17 billion.

The Retail Entitlement Offer closed on Monday, 30 November 2015 and Eligible Retail Shareholders exercised approximately 57% of their entitlements. Unexercised retail entitlements were acquired by other Institutional Investors through the retail shortfall bookbuild. The total amount to be paid by successful participants in the retail shortfall bookbuild was $4.10 per New Share (representing the offer price of $3.85 per New Share plus $0.25 per retail entitlement). Accordingly, eligible retail shareholders who elected not to take up their retail entitlements and ineligible retail shareholders will receive $0.25 in cash for each retail entitlement sold in the retail shortfall bookbuild, less any applicable withholding tax.

For more information please refer to the documentation below.