Australia's Santos ended months of uncertainty on Monday, opting to raise A$3.5 billion ($2.5 billion) through two share sales and the sale of a stake in a gas field to shore up its funding, and named a new chief executive as well.
Santos, scrambling to pay down A$8.8 billion in net debt, had long resisted raising equity, but after rejecting a full takeover offer and a range of bids for its assets over the past month, it said the best way to revive itself was through selling new shares.
"We are very confident that the steps taken today will drive better returns for shareholders by strengthening the company's financial position and underscoring the value of its high quality and diverse asset base," Santos chairman Peter Coates said in a statement to the Australian stock exchange.
Santos has been saddled with debt tied to its biggest project, the newly opened $18.5 billion Gladstone Liquefied Natural Gas (LNG) plant off the east coast of Australia, just as oil prices collapsed, slashing its cash flows.
In August it effectively put all its assets up for sale, looking for the best option to beef up its balance sheet, and announced Chief Executive Officer David Knox would step down.
It ended the review, deciding to sell A$3 billion in new stock to existing shareholders and A$500 million in new shares to a Chinese private equity firm, Hony Capital. The company also agreed to sell its stake in the Kipper gas field to Japan's Mitsui for A$520 million.
All the funds raised will be used to pay down debt.
"We expect inbound interest may continue," Coates said, adding: "We will only sell assets where there is a compelling value case for our shareholders."
As oil prices sank over the past year, investors feared Santos would have to raise equity and fled the stock, knocking its shares down to a 15-year low in September, which effectively cost CEO Knox his job.
Santos named another Scot, Kevin Gallagher, as the new CEO on Monday. The 50-year-old oil industry veteran, 50, was poached from the top job at engineering services firm Clough and will join Santos in early 2016.
"Kevin's record on costs, efficiency, leadership and profitability as CEO of Clough, combined with his experience as a senior Woodside (Petroleum Ltd) executive ... make him ideally suited ... to develop the company's strategy from here," Coates said.