Premier Oil to merge with Chrysaor in reverse takeover deal

Harbour Energy, Chrysaor's largest shareholder, will take over a little more than 39% of the merged company, which will keep its FTSE 250-listing, subject to approval by regulators, creditors and shareholders.

The complex deal will see $2.7bn of total gross debt and certain hedging liabilities repaid and cancelled on completion, with creditors receiving a cash payment of $1.23bn, as well as a stake in the combined business. The agreement also effectively valued Premier's equity at roughly $280.0m.

Premier share and bondholders will hold as much 23% of the enlarged group, while shareholders will end up with 5.45% of the new business.

Premier chairman Roy Franklin said: "The board intends to recommend unanimously this transaction to shareholders as being in the best interests of shareholders and the company."

The new company will be headed up by Harbour chief executive Linda Cook.

As of 1000 BST, Premier Oil shares had shot up 12.57% to 17.10p.