Sable Offshore Corp. said it plans to raise $400 million through separate public offerings of common stock and convertible senior notes, while also lining up a new senior secured term loan to refinance existing debt.
The company intends to sell $100 million of common stock and $300 million of convertible senior notes due 2031. It also expects underwriters to have options to buy up to an additional $15 million of stock and up to an additional $45 million of notes to cover over-allotments.
The financing package is designed to help Sable repay its senior secured term loan with Exxon Mobil Corp., cover transaction fees and expenses, and fund general corporate purposes. The new term loan, the stock sale and the notes offering are all cross-conditioned, meaning each one depends on the others closing.
The notes would mature on July 1, 2031. Sable said the notes would pay interest semiannually, and holders would be able to convert them under certain circumstances and during specified periods. The company would have the option to redeem the notes for cash beginning July 6, 2029, but only if its stock price is above 175% of the conversion price for a specified period and other conditions are met.
If a fundamental change occurs, noteholders could require Sable to repurchase the notes for cash at principal plus accrued interest. Investors could also require repurchase on July 6, 2029.
J.P. Morgan is serving as sole book-running manager for both offerings. U.S. Bank Trust Company is expected to act as trustee for the notes. The market has reacted to these announcements by moving the company's shares -3.41% to a price of $4.25. For the full picture, make sure to review Sable Offshore's 8-K report.
