Oil and gas company Sterling Energy Plc said on Friday it would raise 62.5 million pounds ($103.6 million) in a discounted placing of new shares and that it had ended all talks regarding the sale of the company. Sterling Energy, which said in April it had agreed with its syndicate banks on a waiver until mid-August on repayment schedule of outstanding loans, said it had further amended the waiver agreement to mid-February 2011, conditional upon completion of the placing.
The company, with interests in the Gulf of Mexico, Africa and the Middle East, also said it had named Alastair Beardsall as executive chairman.
The company's strengthened financial position will enhance its negotiating position with regard to both the disposal of the U.S. assets and the potential farmout of some of its exploration interests, proposed Executive Chairman Alastair Beardsall said in a statement.
The company said it would sell 4.81 billion shares at 1.3 pence apiece, a discount of 52.6 percent to the stock's closing price of 2.74 pence on Thursday.
Sterling Energy said it would use the placing proceeds, along with the cash generated from operations, to repay $35 million of debt and to strengthen its working capital position.
By mid-November, the company plans to undertake an open offer to raise about 20.6 million pounds by offering shareholders two new shares for every nine shares held, at the placing price of the current offer.
Shares of the company were down 2.2 percent at 2.68 pence at 0725 GMT on the London Stock Exchange. ($1=.6033 Pound)