(Bloomberg) -- Chesapeake Energy Corp. said it has amassed more than enough cash to pay bondholders through the end of 2018, clearing an overhang that had dogged the natural gas explorer for more than three years.
Chesapeake closed a $1.25 billion private placement of unsecured convertible notes on Wednesday that it can convert to shares in 2019 under certain circumstances, the Oklahoma City-based company said in a statement. Chesapeake now has $1 billion in cash on hand, in addition to an undrawn revolving credit line, according to the statement.
Chesapeake, the second-biggest U.S. gas producer, fired thousands of workers, sold billions of dollars in assets and suspended drilling projects since mid 2013 as a rout in gas prices aggravated a debt burden incurred during the previous decade by the company's co-founder, the late Aubrey McClendon. His successor, Chief Executive Officer Doug Lawler, has said repairing the company's finances was his No. 1 goal.
“With the cash proceeds from the convertible note offering, we have taken measures to provide excess liquidity to address the remaining maturities of our debt through 2018, before any incremental proceeds from the potential asset sales that we are currently working,” Lawler said in the statement.
To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net. To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Steven Frank
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