Chesapeake Energy Raising $600M in Private Placement with Asian Funds

Chesapeake Energy Corp., the second-biggest U.S. producer of natural gas, is raising $600 million from a private placement of convertible stock – via private placement memorandu – with Maju Investments (Mauritius) Pte Ltd., a unit of Singaporean sovereign wealth fund Temasek Holdings (Private) Ltd., and Hampton Asset Holding Ltd., a unit of Chinese investment firm Hopu Investment Management Co. Ltd.

Oklahoma City-based Chesapeake Energy also granted the investors a 30-day option to buy up to an additional $500 million of the convertible preferred shares.

Chesapeake Energy is issuing preferred shares that will be convertible into common stock at a price of $27 a share, reflecting a premium of 23.2% compared with the price where Chesapeake shares traded today. The preferred shares will also pay an annual dividend of 5.75%. The dividend is payable quarterly in arrears.

After May 17, 2015, Chesapeake Energy may require the investors to convert the preferred stock into common stock if the closing price of the common stock is at least 30% higher than the conversion price for 20 trading days during any consecutive 30-day trading period.

Chesapeake Energy, which has gas reserves in Arkansas, Oklahoma, Texas, Louisiana and Pennsylvania, said it plans to use the proceeds to repay debt.

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Since 1999, the founders of PPM have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

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