(Bloomberg) -- Premier Oil Plc and Chrysaor Holdings Ltd. agreed on a merger, bringing together two of the largest U.K. North Sea oil and gas producers.

The deal will be a relief to London-based Premier, which has spent most of the year laboring to restructure its debt, during which time its shares have tumbled 85%. The deal includes an agreement on the reorganization of Premier’s existing debt and cross-currency swaps.

“The transaction will create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250,000 barrels of oil equivalent day,” Premier said Tuesday in a statement. The combined group will have “significant international growth opportunities.”

Chrysaor shareholders will get at least 77% of the combined company. Premier’s stakeholders will get the rest, with the exact amount depending on the conversion of some of its debt into equity.

Premier’s $2.7 billion of total gross debt and certain hedging liabilities will be repaid and cancelled on completion, according to the statement. A cash payment of $1.23 billion will be made to Premier’s creditors, who will also receive shares in the combined group. Premier’s $400 million of letters of credit will be refinanced.

Chrysaor, a North Sea-focused business founded in 2007, made a big splash in the region in 2017 when it paid $3 billion for a package of assets from Royal Dutch Shell Plc. The company, backed by private equity firm Harbour Energy Ltd., has since become the No. 1 oil and gas producer in Britain, having bought assets from Spirit Energy in 2018, as well as ConocoPhillips’s U.K. division.

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