Dallas, Texas 01/28/2014 (FINANCIALSTRENDS) – Rating agency Tudor Pickering announced to its clients on 24th January that it is downgrading the stock of independent oil and gas firm EXCO Resources (NYSE:XCO) to a “Sell” rating as against its previous rating of “Hold”. These downgrades come on the back of announcement by the management of the $1.45 billion market capped firm, results from its rights offering on 17th January.
The Dallas, Texas based EXCO Resources (NYSE:XCO) announced that out of its close to 54.5 million shares of common stock issued totally by the firm till date, nearly 28.2 million shares were tied up with two institutions as part of the recently concluded rights offering. While WL Ross & Co. LLC took ownership of close to 19.6 million shares, Hamblin Watsa Investment Counsel Ltd. bought 6.7 million shares on offer. Total proceeds of $273 million was raised from this exercise by the oil and gas exploration firm and has a total of 272 million shares of common stock outstanding in its treasury.
At the time of announcement, the oil firm’s Non-Executive Chairman of the Board Jeffrey D. Benjamin had been quoted to have said that, “We are very pleased by the support of our existing shareholders and their participation has helped strengthen EXCO.”
Post these changes in the holding pattern of its common stock, EXCO Resources (NYSE:XCO) top three shareholders are WL Ross & Co. LLC which accounts for 18.7 percent, Oaktree Capital Group Holdings GP, LLC which accounts for 16.6 percent and Hamblin Watsa Investment Counsel Ltd. which accounts for 6.4 percent of the total stock issued by the oil maker.
EXCO Resources (NYSE:XCO) has indicated that it would be using close to $28.9 million of the funds raised via the stake sale to retire debt it had raised with respect to Asset Sale Requirement and use the additional $243.2 million of the proceeds to honour its commitment under the “EXCO Resources Revolving Credit Agreement”.