British oil major BP raises nearly $12 billion in hybrid bonds issue

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BP raised $5 billion, 4.75 billion euros ($5.34 billion) and 1.25 billion pounds ($1.56 billion) in the United States, Europe and the United Kingdom, respectively, according to IFR data.

This is the first time the company has raised money by issuing hybrid bonds, which place less strain on balance sheet as the principal is not required to be repaid, the spokeswoman said.

The fundraising comes days after BP decided to write off up to $17.5 billion from the value of its assets, betting the COVID-19 crisis would pressure energy demand and accelerate a shift away from fossil fuels.

Like its rivals, the British oil major is set to take a big hit to revenue from an unprecedented collapse in demand due to the coronavirus outbreak. The impairments are set to raise its debt burden sharply and increase pressure to reduce its dividend.

The company said earlier this month, it would cut about 15% of its workforce in response to the coronavirus crisis and as part of Chief Executive Bernard Looney’s plan to shift the oil and gas major to renewable energy.