Woodside raises $ 2 billion in bonds amid growing investor concerns over capital expenditure plans
Woodside Energy, an Australian oil and gas company, raised $2 billion on the U.S. Bond Market, the company announced on Friday. This news caused its shares to fall on concerns about the company's capital spending plans.
The bond issue consisted of two tranches: $1.25 billion in 10-year bonds at a coupon rate of 5.1%, and $750 millions through 30-year bonds at a 5.7% coupon.
Woodside, Australia's largest gas producer, stated that the funds would be used for general corporate purposes without disclosing details.
Standard & Poor's, a ratings agency, believes the company can use the money for two recent acquisitions totaling more than $3 billion.
Crude oil prices are also at 14-month lows, which has pushed the company's share price down by as much as 2.2%.
Woodside shares were in the firing lines over the last week. The stock price was affected by the falling crude prices, and the uncertainty over its capex strategy, according to Tim Waterer, an analyst at KCM Trade.
Investors are unsure whether funds will be invested in core business activities, or into development projects that may not produce the desired return on investment within the short-to-medium term.
Woodside's strategy to reduce carbon emissions has also enraged investors and activists. In April, the climate plan of Woodside was rejected by shareholders.
Since then, the company announced the purchase of a $2.35 billion clean ammonia plant in Texas as well as the $900,000,000 acquisition of a LNG terminal in Louisiana. (Reporting from Rishav in Bengaluru, and Lewis Jackson. Editing by Subhranshu & Savio D’Souza.
(source: Reuters)
