Range Resources Ltd (LON:RRL) has announced a US$20mln funding deal, with drill contractor LandOcean subscribing for US$20mln of convertible notes.
LandOcean will lend US$20mln for a 3 year period, taking 8% interest per year (payable annually in arrears). It can convert the debt to equity at a price of 0.88p per share, which would be a 130% premium to Friday’s closing price.
If the notes are fully converted, the contractor would own just under 20% of the company’s enlarged share capital.
The cash proceeds will go back to LandOcean, to cover outstanding payments due under an existing master services agreement.
LandOcean continues to provide Range Resources with financing for work being carried out under the services agreement.
A general meeting is being called for December 20 for shareholders to approve the proposed new arrangements.