Iberdrola sells its stake in Petroceltic at a premium to the market
PETROCELTIC, the Irish oil and gas explorer, which revealed last week that it had hit a snag while drilling in Algeria, said yesterday that the Spanish utility Iberdrola had sold its near-16pc stake in the company and abandoned an option to participate in an Algerian gas project.
The shares were sold at 16p to new and existing shareholders, which is a 1p premium to the market price the day before the transaction was agreed.
Iberdrola will receive €43.9m from the sale of 15.7pc of Petroceltic and the sale of an option to buy 49pc of Petroceltic's Algerian gas field, Isarene.
"We are delighted that the principal shareholders in Petroceltic have expressed their strong support for the company by acquiring the Iberdrola stake at a premium to market," Petroceltic chief executive Brian O'Cathain said yesterday.
"Our investors see the considerable latent value in our portfolio -- in particular in our Algerian assets, where our recent drilling campaign has demonstrated the presence of a very large gas accumulation."
Iberdrola, which is much larger than Petroceltic, bought into the Irish company in June 2008. The Irish company, which has energy assets in Algeria, Italy and Tunisia, will have to repay Iberdrola a €7.3m option fee over 18 months.
The sale leaves Petroceltic with the challenge of financing licence expenditure in Algeria. The Irish company is now likely to find a new partner at its Algerian subsidiary, according to analysts.
"Although the share sale removes the comfort blanket of a large investor, it returns a full stake in the licence to Petroceltic -- allowing full flexibility in farm-out negotiations that are expected this year," Davy Stockbrokers analyst Joe Langebroek said in a note to investors.