Oct 5 U.S. natural gas producer Chesapeake
Energy Corp closed a private placement of $1.25 billion
of debt on Wednesday, shoring up capital for debt repayment 10
months after it said it had no plans to file for bankruptcy.
Chesapeake, struggling with a huge pile of debt taken for
shale development, said it could convert the 10-year notes to
equity in three years if its stock trades above 130 percent of
the conversion price for a specified period.
The company also said it exchanged its common shares for
preferred shares representing about $1.2 billion of liquidation
value, at a discount of over 40 percent.
"Through the transactions that closed today, we have
substantially improved our capital structure," said Chesapeake
Chief Executive Doug Lawler.
"These transactions represent major steps toward reaching
our financial goals of $2-3 billion of debt reduction and
growing production within free cash flow."
The company's total debt stood at about $8.7 billion as of
The Oklahoma-based company said its cash on hand as of Sept.
30 was about $1 billion, pro forma for the convertible debt
Shares of the company were up 2 cents at $6.82 in extended
(Reporting by Vishaka George in Bengaluru)