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CNOOC Plans to Re-launch Its IPO in Feb
China National Offshore Oil Corp (CNOOC), the country's third-largest oil firm, plans to re-launch its initial public offering in February to raise about US$1.1 billion, the Shenzhen Securities Times said Friday,December 8.
CNOOC attempted a US$1 billion IPO in October 1999, but former lead manager Salomon Smith Barney cancelled the flotation just hours after slashing the price, citing adverse market conditions.
The Shenzhen paper said the company plans to sell 1.8 billion shares, or 1.6 billion new shares and 200 million existing shares. The shares would be listed in Hong Kong and New York, giving CNOOC an enlarged public float of 22.5 per cent upon listing.
CNOOC officials in China declined to comment on the report, citing restrictions imposed by the Stock Exchange of Hong Kong. "We do have plans to do this transaction early next year but can't really reveal details right now," added a Hong Kong-based underwriter involved in the IPO.
Oil industry sources had been expecting CNOOC to re-launch the IPO with the intent of raising US$1.5 billion-$2 billion.
Nevertheless, a number of global super majors, including Texaco, Royal Dutch/Shell Group and BP Amoco, have already expressed interest in taking up part of the offering.
Royal Dutch/Shell signed an agreement in November to pay for US$300 million of shares in the upcoming IPO, while BP Amoco has been talking about buying US$200 million worth of shares. Banking sources said the company had been working for about a year to secure strategic investors for the IPO re-launch. Other analysts added that participation by international oil majors would be crucial in CNOOC's second attempt to come to market.
Strategic investors earlier this year took up large stakes in the IPOs of PetroChina and Sinopec. The two state oil giants together raised more than US$4 billion in their IPOs earlier this year.
Merrill Lynch and Credit Suisse First Boston have replaced Salomon as the lead managers of the CNOOC stock sale.
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