(Reuters) - Creditors of Premier Oil (L:PMO) gave the indebted oil and gas producer their approval for $800 million (£616.1 million) of North Sea acquisitions under a scheme that would allow it to delay debt repayments and issue new shares.
Shares in Premier Oil spiked to session highs following Wednesday's announcement, and by 1357 GMT they were up 2.7% at 104.6 pence.
The vote supporting Premier's management is a blow to hedge fund ARCM, which holds 15% of Premier's debt and has had a growing short position in its shares since 2017. It has around 17% of its stock, some four times higher than the average for London-listed firms.
ARCM has fought a public battle against Premier's plans, saying they were based on overly-high commodity price assumptions, overly-low decommissioning liability estimates and would make Premier too dependent on a weak gas market.
An investor with a short position makes a profit on a stock when its price declines. Premier's shares rose around 20% after it announced its plans on Jan. 7, but have since lost most of that ground to trade at 104.5 pence, up 6.4% year-to-date.
Premier needs investors representing at least 75% of its outstanding debt of around $2 billion to agree to its plans under an arrangement reached with its creditors in a debt restructuring in 2017.
"The plan put forward by Premier Oil is the most credible and deliverable proposal to deliver value for the company's stakeholders," Emma Kane, a spokeswoman for the ad hoc creditors' committee, said.
Wednesday's vote still needs to be formally approved by a judge in a hearing expected on March 17.
Of the creditors subject to the schemes, 86% of Super Senior Commitments and 75% of Senior Commitments have agreed to vote in their favour at the creditor meetings, Premier said, referring to different classes of bondholders.
"Today's vote shows that Premier Oil's proposals have the support of the vast majority of Premier Oil's creditors and the overwhelming support of those whose economic interest is aligned with the success of the company," Kane added.