Kosmos Energy Ltd. Announces Offering Of $300 Million Of Convertible Senior Notes Due 2030
March 04 2024 - 4:08PM
Business Wire
Kosmos Energy Ltd. (NYSE/LSE: KOS) (“Kosmos” or the "Company")
announced today that it intends to offer, subject to market and
other conditions, $300 million aggregate principal amount of its
convertible senior notes due 2030 (the "notes") in a private
placement. The Company also expects to grant the initial purchasers
an option to purchase up to an additional $45 million aggregate
principal amount of notes, for settlement within a 13-day period
beginning on, and including, the date on which the notes are first
issued. The notes will be senior, unsecured obligations of the
Company. The notes will rank pari passu with the Company’s existing
senior notes and the Company’s revolving credit facility. The notes
will be guaranteed (i) on a senior, unsecured basis by certain of
the Company’s existing subsidiaries that guarantee on a senior
basis the Company’s revolving credit facility and the Company’s
existing senior notes, and (ii) on a subordinated, unsecured basis
by certain of the Company’s existing subsidiaries that borrow under
or guarantee the Company’s commercial debt facility and guarantee
on a subordinated basis the Company’s revolving credit facility and
the Company’s existing senior notes. Upon conversions of the notes,
the Company will satisfy its conversion obligation by paying cash
up to the aggregate principal amount of the notes to be converted,
and paying or delivering, as the case may be, cash, shares of the
Company’s common stock or a combination of cash and shares of the
Company’s common stock, at the Company’s election, in respect of
the remainder, if any, of its conversion obligation in excess of
the aggregate principal amount of the notes to be converted. The
interest rate, conversion rate and other terms of the notes are to
be determined upon pricing of the offering.
The Company intends to use the net proceeds from the sale of the
notes to (i) repay a portion of outstanding indebtedness under the
Company’s commercial debt facility; (ii) pay the cost of the capped
call transactions described below; and (iii) pay fees and expenses
related to the offering.
In connection with the pricing of the notes, the Company expects
to enter into privately negotiated capped call transactions with
one or more of the initial purchasers of the notes or their
respective affiliates and/or other financial institutions (the
“option counterparties”). The capped call transactions are expected
generally to reduce potential dilution to the Company’s common
stock upon any conversion of the notes and/or offset any cash
payments the Company is required to make in excess of the principal
amount of converted notes, as the case may be, with such reduction
and/or offset subject to a cap. If the initial purchasers of the
notes exercise their option to purchase additional notes, the
Company expects to enter into additional capped call transactions
with the option counterparties, and expects to use a portion of the
net proceeds from the additional notes to pay the cost of such
additional capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the Company expects the option
counterparties or their respective affiliates to enter into various
derivative transactions with respect to the Company’s common stock
concurrently with or shortly after the pricing of the notes, and
may unwind these various derivative transactions and purchase the
Company’s common stock in open market transactions shortly after
the pricing of the notes. This activity could increase (or reduce
the size of any decrease in) the market price of the Company’s
common stock or the notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Company’s common
stock and/or purchasing or selling the Company’s common stock or
other securities of the Company in secondary market transactions
following the pricing of the notes and prior to the maturity of the
notes (and are likely to do so during any observation period
related to a conversion of notes). This activity could also cause
or avoid an increase or a decrease in the market price of the
Company’s common stock or the notes, which could affect the ability
of noteholders to convert the notes and, to the extent the activity
occurs during any observation period related to a conversion of the
notes, it could affect the number of shares and value of the
consideration that noteholders will receive upon conversion of the
notes.
The offering is being made to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). The
offer and sale of the notes, the guarantees and any shares of the
Company's common stock issuable upon conversion of the notes have
not been and will not be registered under the Securities Act, or
under any state securities laws, and the notes and such shares may
not be offered or sold in the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy the notes in the offering, nor
shall there be any sale of such notes in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that Kosmos
expects, believes or anticipates will or may occur in the future
are forward-looking statements, including the potential offering of
convertible senior notes and the anticipated terms of, and effects
of entering into, the capped call transactions. Kosmos’ estimates
and forward-looking statements are mainly based on its current
expectations and estimates of future events and trends, which
affect or may affect its businesses and operations. Although Kosmos
believes that these estimates and forward-looking statements are
based upon reasonable assumptions, they are subject to several
risks and uncertainties and are made in light of information
currently available to Kosmos. When used in this press release, the
words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will,”
“potential,” “may” or other similar words are intended to identify
forward-looking statements. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond
the control of Kosmos, which may cause actual results to differ
materially from those implied or expressed by the forward-looking
statements. Further information on such assumptions, risks and
uncertainties is available in Kosmos’ Securities and Exchange
Commission filings. Kosmos undertakes no obligation and does not
intend to update or correct these forward-looking statements to
reflect events or circumstances occurring after the date of this
press release, except as required by applicable law. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by
this cautionary statement.
About Kosmos Energy Ltd.
Kosmos is a full-cycle deepwater independent oil and gas
exploration and production company focused along the Atlantic
Margins. The Company’s key assets include production offshore
Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as a
world-class gas development offshore Mauritania and Senegal. Kosmos
also maintains a sustainable proven basin exploration program in
Equatorial Guinea and the U.S. Gulf of Mexico. Kosmos is listed on
the New York Stock Exchange and London Stock Exchange and is traded
under the ticker symbol KOS.
Kosmos Energy Ltd. is headquartered in Dallas, TX.
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Investor Relations Jamie Buckland +44 (0) 203 954 2831
jbuckland@kosmosenergy.com
Media Relations Thomas Golembeski +1-214-445-9674
tgolembeski@kosmosenergy.com
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