Sunshine Oilsands Ltd, a Canadian oil explorer backed by Chinese state-owned enterprises, could raise up to $700 million through a Hong Kong initial public offering (IPO), writes Reuters. Sunshine Oilsands raised about $230 million in March last year from a group of investors including a unit of Bank of China, China Life Insurance (Overseas) and Hong Kong private equity fund Cross-Strait Common Development Fund, writes Reuters.
Reuters – Sunshine Oilsands Ltd, a Canadian oil explorer backed by Chinese state-owned enterprises, could raise up to $700 million through a Hong Kong initial public offering (IPO), in what is set to be the biggest new listing in Asia in the new year.
The IPO will consist of all new shares, representing 25 percent of the company’s expanded capital, one source with direct knowledge of the plans told Reuters on Tuesday. Sunshine Oilsands and its bankers started drumming up demand for the offering on Monday and will launch the IPO on Feb. 6, added a second source.
Pricing is slated for Feb. 14, with its debut on the Hong Kong stock exchange set for Feb. 21. Thomson Reuters publication IFR reported on Friday the IPO could raise between $500-700 million, valuing the company at up to $2.8 billion.
Sunshine Oilsands, which owns 1.14 million acres of oil sands leases in the Athabasca region in Canada, raised about $230 million in March last year from a group of investors including a unit of Bank of China, China Life Insurance (Overseas) and Hong Kong private equity fund Cross-Strait Common Development Fund, a company statement showed.
Orient International Resources Group Ltd, controlled by Hong Kong businessman Hok Ming Tseung, is also a major shareholder of Sunshine Oilsands.
The Canadian company has been eyeing a Hong Kong IPO since the middle of last year, according to local press reports. Sunshine Oilsands said in September it filed its A1 listing application with the Hong Kong exchange for the proposed IPO.
Sunshine Oilsands will kick start what is expected to be another slow year for initial offerings after demand for new listings slumped 42 percent in 2011 from 2010 to the lowest in three years..
Six companies have gone public in Hong Kong since the beginning of the year, with small-sized deals that raised a combined HK$1.4 billion ($180.5 million).
The Sunshine Oilsands IPO would follow a series of energy takeovers by Chinese companies in recent months as the world’s second-largest economy seeks to secure steady oil supply to support growth in the coming years.
Most of the recent deals have been in shale and other unconventional oil sources and technology, including a $2.2 billion deal between China’s Sinopec and Devon Energy Corp. this month to develop five shale oil fields.
CNOOC Ltd closed a $2 billion deal in November for a stake in a Canadian oil sands project and also started talks to buy a stake in Frac Tech International, which operates technology used in hydraulic fracturing.
The company hired BOC International, Deutsche Bank and Morgan Stanley as joint global coordinators and joint sponsors of the IPO, added the sources, who were not authorised to speak publicly on the matter.