Boston, MA 06/18/2014 (wallstreetpr) – Independent oil and gas company, Forest Oil Corporation (NYSE:FST) has been assured of a financing commitment by Sabine Oil & Gas as part of their original disclosed deal in early May. Both the companies have refuted the report of the financing being pulled out and instead reiterated the commitment. Following this, shares of Forest Oil jumped in the bourse.
Financing Remains In Place
Sabine Oil & Gas has categorically denied a report that indicated pulling out of $850 million Bridge financing facility to Forest Oil Corporation (NYSE:FST) and termed the report as “incorrect.” The financing commitment needed the consummation of the deal with Forest Oil is still in place and that there were no changes in the description filed by New Forest Oil Inc in the Form S-4.
The company added that the planned amalgamation of the companies is moving ahead well and that all the parties concerned have fully committed to this deal. Everyone concerned will take continuous necessary steps to make sure that the transaction is consummated to all the shareholders’ benefit.
Key Updates On Business Merger
There is no change in the $1 billion new revolving credit facility commitment as has been indicated in the Form S-4. Originally, the facility was underwritten as 50/50 by Barclays Bank PLC and Wells Fargo Securities, LLC apart from its affiliates. There were five more banks joined subsequently for 10% each.
Sabine Oil & Gas said that the process was launched to promote a consortium facility with the potential participants meeting scheduled for June 11. However, this process of syndication deferred, which does not necessarily mean going away from the commitment of financing plans of the merged entity.
Stocks React
Shares of Forest Oil Corporation (NYSE:FST) jumped 17.9% during the intra-day trading to reach $2.37 before settling with a gain of 14.4% to end Tuesday’s regular trading at $2.30. The volume of trading was also significant since 9.38 million shares changed hands compared to the three-month volume of 4.25 million shares.
