Gulf Keystone places 85.9 mln shares at 21 pct discount

(Adds detail, background, updates share movement)

March 31 (Reuters) - Oil producer Gulf Keystone Petroleum said it raised about $40.7 million through a share placement at a discount of 21 percent to the stock's Monday close.

Shares (Berlin: DI6.BE - news) in the company fell as much as 18.5 percent to 33 pence in early trade on the London Stock Exchange (Other OTC: LDNXF - news) .

Iraqi Kurdistan-focused Gulf Keystone said it placed 85.9 million shares at 32 pence per share, compared with their previous close of 40.5 pence.

Gulf Keystone is one among a number of oil producers in the region struggling due to irregular payments for crude oil by the Kurdistan Regional Government.

A group of investors led by former Tullow Oil (LSE: TLW.L - news) chairman Patrick Plunkett said on Monday that it had offered to help Gulf Keystone solve its funding problems but the company had so far declined to engage in talks.

Shares in the company were down 9.9 percent at 36.4 pence at 0851 GMT on the London Stock Exchange.

(Reporting By Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi)