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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Premier Oil plc    PMO   GB00B43G0577

PREMIER OIL PLC

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UK watchdog fines fund ARCM over Premier Oil short selling breaches

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10/14/2020 | 08:36am EDT
FILE PHOTO: The logo of the new Financial Conduct Authority in the Canary Wharf business district of London

LONDON (Reuters) - Britain's markets watchdog fined hedge fund Asia Research and Capital Management (ARCM) on Wednesday for a lack of transparency over a short position in Premier Oil, the first such penalty for a breach of short-selling rules.

The Financial Conduct Authority (FCA) fined Hong Kong-based ARCM 873,118 pounds ($1.13 million) for repeatedly breaching reporting rules and failing to provide important information to both the regulator and the market.

ARCM declined to comment.

Between February 2017 and July 2019, ARCM failed to make 155 notifications to the FCA and 153 public disclosures of its position in Premier Oil and built a short position equivalent to 16.85% of Premier Oil's issued share capital, the FCA said.

It took another 106 trading days before ARCM notified the FCA and disclosed its position, but the FCA said the fund reported the breaches as soon as it identified them and was able to, partly because social unrest in Hong Kong at the time barred staff from accessing the office.

Simon Morris, a partner at law firm CMS, said the penalty for non-intentional and self-reported breaches showed the FCA's "unforgiving approach towards breaches of market reporting requirements".

ARCM's fine was reduced by 30% because it fully cooperated with the FCA and beefed up controls.

The fund's net short equity position, coupled with its status as Premier Oil's biggest creditor, led to a bitter battle with the FTSE 250 group after it opposed the company's refinancing plans.

One source familiar with the situation said ARCM's short position was a hedging tool often used by credit funds and represented only a fraction of its debt exposure.

Premier Oil, which traces its history back to the 1930s, underwent a debt restructuring in 2017 after the last oil price collapse and last week agreed to be taken over by private equity-backed oil and gas group Chrysaor.

(Reporting by Kirstin Ridley and Clara Denina, editing by Louise Heavens and Elaine Hardcastle)

By Kirstin Ridley and Clara Denina


Stocks mentioned in the article
ChangeLast1st jan.
LONDON BRENT OIL -1.77% 39.9 Delayed Quote.-37.71%
PREMIER OIL PLC -4.24% 11.6743 Delayed Quote.-87.57%
WTI -2.15% 38.025 Delayed Quote.-36.11%
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Financials (USD)
Sales 2020 1 078 M - -
Net income 2020 -667 M - -
Net Debt 2020 1 783 M - -
P/E ratio 2020 -0,45x
Yield 2020 -
Capitalization 147 M 147 M -
EV / Sales 2020 1,79x
EV / Sales 2021 1,35x
Nbr of Employees 770
Free-Float 98,3%
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Technical analysis trends PREMIER OIL PLC
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 7
Average target price 0,43 $
Last Close Price 0,16 $
Spread / Highest target 427%
Spread / Average Target 171%
Spread / Lowest Target 62,9%
EPS Revisions
Managers
NameTitle
Anthony Richard Charles Durrant Chief Executive Officer & Executive Director
Roy Alexander Franklin Non-Executive Chairman
Stuart Royston Wheaton Chief Operating Officer
Richard Andrew Rose Executive Director & Finance Director
Nic Braley Chief Commercial & Technical Officer
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