Continental CEO Hamm pledges $2.6 billion in shares to secure personal loan
By Joshua Schneyer
(Reuters) - Continental Resources Inc (CLR.N: Quote) said that Harold Hamm, its chief executive officer and majority shareholder, has pledged about one-fourth of the company shares he owns as collateral for a personal loan, according to a regulatory filing.
The shares Hamm posted as collateral are worth $2.6 billion and represent an 18.5 percent chunk in the Oklahoma-based drilling giant, according to a Reuters calculation. Hamm could be forced to offer more collateral for the loan if the value of his company falls.
Divorce lawyers for Hamm recently said he took out a personal loan to fund a divorce settlement with ex-wife Sue Ann Arnall. Under a November ruling, Hamm owed Arnall nearly $1 billion and last week cut her a handwritten check for the entire amount.
Hamm pledged 68.7 million of his Continental shares as collateral for a personal loan on Jan. 9, according to a Jan. 13 Securities and Exchange Commission filing. The document did not state the purpose nor the terms of the loan, how much Hamm borrowed or who lent him the money.
Hamm will need to pledge additional shares if the price of Continental stock falls below the "minimum value requirements" of the loan, the company said without offering specifics.
Hamm owns nearly 253 million shares, or 68 percent of his firm. He will keep voting rights over the shares posted as collateral, the firm said.
Following news of Hamm's loan, Continental shares initially fell on Wednesday, but rallied late in the day, jumping 6.1 percent to $37.98.
Continental has said the divorce award, one of the largest in U.S. history, has no impact on its business or operations. "As we have said all along, there will be no change of control in the company," said spokeswoman Kristin Thomas. Continued...