* Origin to offer 4-for-7 shares at 34 pct discount
* To cut dividend, capital spending and sell some assets
* Shares have slumped to nine-year low
* Australia Pacific LNG still seen profitable (Adds CEO, analyst comments)
By Sonali Paul
MELBOURNE, Sept 30 (Reuters) - Australia's Origin Energy ORG.AX has asked its shareholders for $1.8 billion to help cut debt as weak oil prices have dented the outlook for its huge liquefied natural gas project.
The move by Australia's largest gas and power retailer comes after mining and trading giant Glencore Plc GLEN.L was forced to sell new shares, suspend its dividend and flag asset sales to cut its $30 billion debt pile amid a broad slump in commodities, and after Origin's rival Santos STO.AX put its assets on the block.
Origin is turning to shareholders to raise money after its shares sank to a nine-year low, down nearly 30 percent over the past month, as investors feared it would not be able to service its A$10.3 billion ($7.2 billion) in net debt.
It had banked on doing so with revenue from its A$25 billion Australia Pacific LNG project (APLNG).
"The broader market has made very clear that the combination of (oil) price volatility and the levels of debt we have in our business are a deterrent to investors investing in the company, and we must fix that," Chief Executive Grant King told reporters on Wednesday.
Investors pressured Origin to beef up its balance sheet just as APLNG is set to start producing, with its oil-linked LNG revenue hit by the slump in world oil prices to their lowest since 2009.
Origin's King had said in August there was no need to issue equity after the company sold its stake in New Zealand's Contact Energy CEN.NZ and cut debt.
"They've been pushed into this position as a result of the continued weakness in the oil price. Following a significant share price fall, it's far from an ideal situation," said Gareth James, an analyst at Morningstar in Sydney.
Origin said it wants to raise A$2.5 billion by selling new shares to existing shareholders at a 34 percent discount to the stock's closing price of A$6.10 on Tuesday.
It also plans to reap a further A$2.2 billion by cutting dividends by a fifth, paring capital spending and selling some gas pipelines, wind farm investments and exploration stakes.
Standard & Poor's and Moody's both affirmed their ratings on Origin after its announcement, saying it would now have a strong buffer for its investment grade ratings.
King said APLNG, co-owned by ConocoPhillips (NYSE:COP) COP.N and China's Sinopec, would break even at $38-$42 per barrel of oil equivalent. Benchmark Brent crude last traded at $48.
"On every analysis that we run it will still be a valuable investment for shareholders," he added. ($1 = 1.4259 Australian dollars)