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$66m placement gives Ithaca buying power in North Sea

Ithaca EnergyFri: North Sea driller Ithaca Energy has raised $66 million (£43m) in a non-brokered private placement that gives an Israeli conglomerate almost 20% of the firm.

Ithaca, which is based in Aberdeen and listed on London’s AIM as well as the Toronto Stock Exchange, hailed the investment by a subsidiary of Delek Group as a “solid vote of confidence” that reduced its net debt and gave it the firepower to grow its portfolio in the Greater Stella oilfield.

Delek paid a 19% premium to the previous day’s closing share price for its 19.9% stake, despite continued uncertainty over low oil prices.

Chief executive Les Thomas said: “We are pleased to have secured Delek’s investment in the Company at a significant premium to the prevailing share price at this time of uncertain oil prices.

The investment provides a solid vote of confidence in the long term value of Ithaca by a successful oil and gas investor and provides additional flexibility to execute the financial and strategic priorities of the business.”

Ithaca said the investment proceeds will be used to strengthen the balance sheet, reduce bank debt and “provide flexibility to pursue value-accretive satellite opportunities in the Greater Stella Area”.

Delek is an Israeli listed conglomerate with significant natural gas exploration and production activities in the Levant Basin in the Eastern Mediterranean.

The government has sold off another 1% of its stake in Lloyds Banking Group, reducing its total interest in the bailed-out lender to below 11%.

Sports Direct fell 6.6% after the British Insolvency Service said that criminal proceedings had been opened against its chief executive.

UK Financial Investments, which manages the government’s stakes in Lloyds and Royal Bank of Scotland, has now recouped £15.5 billion of the £20.5bn of taxpayer cash required to rescue Lloyds during the 2008 banking crisis.

There was worse-than-expected report on the UK trade deficit. According to the Office for National Statistics, the deficit hit £11.1bn in August compared with forecasts for £9.9bn. The UK’s deficit on trade in goods and services declined from £4.5bn in July to £3.3bn in August.

Exports of goods rose by £0.8bn to £23.6bn, driven higher by a £0.6bn increase in car exports to a record. Imports declined £0.3bn to £34.7bn over the same period.

The UK’s construction output fell 4.3% against the 1% increase expected, its biggest month to month fall since December 2012.

The FTSE 100 rose 41 points or 0.69% to close at 6,416.

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