Santos share offer falls short

Response was lukewarm to Australian exploration company Santos’ attempt to raise $1.35 billion through a share issuance.

Shareholders picked up 57 percent of the entitlements, leaving the company $585 million short of its target.

Santos had previously sold $500 million worth of shares to Chinese private equity firm Hony Capital, as well as its stake in the Kipper gasfield offshore Victoria for another $520 million, topping the company’s equity sales to $2.5 billion.

The low oil price is pressing on Santos’ shares as it continues recapitalisation efforts. With multiple LNG projects in Australia, the company is also sensitive to LNG price, which fell by $0.50 per million British thermal units to $7.30 at the end of November.

The troubled company recently named Kevin Gallagher as the new CEO, who would be steering a $3.5-billion debt package underwritten by creditors to ease the company’s total debt of $8.8 billion.