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Oil producer is trying to get borrowings back under control

Oil producer Tullow Oil (TLW) is under the cosh as it progresses a $750m rights issue at 130p to reduce the pressure on its stretched balance sheet.

It hasn’t raised enough money, in our view, as the rights issue is only 15% of the company’s total net debt of $4.8bn.

Tullow’s net debt hit an eye-watering five times earnings at the end of 2016.

Existing shareholders will receive rights to buy 25 new shares for every 39 shares they own.

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