Chesapeake Spins-Off Seventy Seven Energy; SSE Shares Up Roughly 2.25 Percent On First Day Trading
Back in May Chesapeake Energy (NYSE: CHK) said it would spin-off its oil services unit in an effort to relieve the parent company of roughly $1B in debt. The new unit will be identified as Seventy Seven Energy (NYSE: SSE). This new company is not related to the Ukraine based Seven Seventy Petroleum firm which operates gasoline filling stations in the Chernihiv region. Chesapeake's spin-off will be recapitalized and push back a $400M dividend to manage intra-company debts. The entire move is expected to be tax-free.
After Monday's close Chesapeake distributed one share of Seven Seventy for every 14 shares of Chesapeake outstanding as of the June 19th 5:00PM EDT record time. Any shareholder entitled to fractional shares were paid the cash-value of such shares, no fractional shares were to be issued.
As of today, Tuesday July 1st, Seventy Seven Energy opened for trading at $23.62 and is up roughly 2.25 percent currently to $24.10.
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