Chesapeake obtains US$ 3 Billion loan – pressure on McClendon increases

Chesapeake Energy Corp has announced that it has received a loan worth US$ 3 billion from Goldman Sachs and Jeffries Group that is expected to allow “significant additional financial flexibility” as the company undertakes asset sales during the remainder of 2012. The loan is planned for use in the repayment of money borrowed from the company’s US$ 4 billion credit facility.

Chesapeake has stated plans to sell approximately US$ 10 billion worth of assets in 2012 in order to help bridge a funding gap caused by low gas prices and what Standard & Poor’s referred to as “massive internal funding shortfalls.”

Recent concerns over financial irregularities at the company, sparked by Reuter’s revelation that the McClendon had received billions of dollars of personal loans using company assets as collateral, have caused investors to demand changes in the way the company is governed. It was at the request of shareholders that McClendon be removed from his position as company chairman. The U.S. Securities and Exchange commission has opened an informal inquiry into the alleged activities.

Shares in Chesapeake have dropped 34% in total over the course of the year.

Edited from various sources by David Bizley

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