CNOOC Ltd., China’s major offshore oil producer, is reportedly planning to raise around USD 4.4 billion (28.08 billion yuan) during its stock market debut in Shanghai, marking it as one of the largest public offerings in mainland China.
In a sales prospectus, the company stated that the fundraising will then be expanded to USD 5.71 billion (32.29 billion yuan) although subject to exercising an option of buying and selling more shares.
Sources confirmed that CNOOC has priced the Shanghai offering at USD 1.69 per share, which is a 13% premium to its share price in Hong Kong on Friday. The company claimed that it would leverage the proceeds of the share sale to fund seven oilfield projects and one gas field facility in China and overseas.
The Shanghai IPO comes after CNOOC was delisted from the New York Stock Exchange last October when the U.S. blacklisted the company citing suspected links to the Chinese military. State-supported competitors such as Sinopec and PetroChina are already listed in Shanghai.
Interestingly, CNOOC’s move also comes as several Chinese firms have ceased plans to list in Shanghai citing business activity disruption given the strict city-wide lockdown to tackle the biggest Coronavirus outbreak in two years.
Apart from this, CNOOC is also looking to capitalize on surging global oil prices amidst the Russia-Ukraine conflict. The company anticipates Q1 profits to rise around 62%-89% from the previous year.
The oil giant priced its Shanghai offering at 1.05 times net assets or 23.88 times earnings, again subject to exercising the greenshoe option.
For the unversed, CNOOC’s international division has a portfolio that comprises assets in some of the most substantial basins in Africa, Asia, Europe, the Middle East, and the Americas.
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