Continental Resources Chief Executive Officer Harold Hamm pledged nearly 18% of his company’s outstanding shares as collateral for a personal loan. The pledged shares are valued at about $2.6 billion and represent 27% of his holding in Continental Resources.
Billion-dollar divorce judgment
As reported by ValueWalk, oil billionaire Harold Hamm, who is also chairman of the Oklahoma City-based energy company, is currently in a divorce battle with his ex-wife Sue Ann Arnall. After the divorce trial ended in November, he was ordered to give his former wife $1 billion from their then-massive oil empire centered on the stock of Continental Resources, the oil company Hamm founded. However, since the divorce, the price of oil has tumbled, as has the amount of Hamm’s fortune.
But for his ex-wife, $1 billion in guaranteed cash isn’t enough, as she is suing for more, citing, among other items, that Hamm owes her a lump sum from the divorce decree. Not to be outdone, Hamm is also suing to change the divorce ruling, contending that his massive fortune is now a shadow of its former self.
In a court filing, Harold Hamm said he “is going to have to borrow money in order to pay this judgment to petitioner.”
Hamm pledged shares worth $2.6 billion
In his latest regulatory filing with the Securities and Exchange Commission, Harold Hamm revealed that he has put up 68.7 million shares as collateral to secure the funding from an undisclosed source and may have to pledge more shares in the future. Based on Wednesday’s market price, the pledged shares are valued at about $2.6 billion and represent 27% of the nearly 253 million shares Hamm holds in Continental Resources.
The Oklahoma City-based energy company has 372.2 million shares outstanding, and 86.1 million of those are in the hands of public investors and available to trade. The regulatory filing reveals that, as part of Hamm’s loan, he could be required to put up more shares if the value of the company’s stock drops.
Though the regulatory filing doesn’t reveal why Hamm took out the loan backed by his Continental shares, his move comes just days after his ex-wife cashed a check for nearly $975 million, which was meant to satisfy the couple’s recent divorce decree.
The energy company maintained that the divorce award has no impact on its business or operations. An energy analyst too said Hamm’s personal borrowing won’t damage the company or other shareholders unless Continental shares continue to fall sharply on lower oil prices. Continental’s shares have lost over half of their value over the last four months.