Chinese oil giant CNOOC Ltd said on Monday it will raise 28.08 billion yuan ($4.41 billion) in a share listing in Shanghai, after setting the price for what will be mainland China’s 11th-biggest public stock offering.
Fundraising will be expanded to 32.29 billion yuan if an over-allotment “greenshoe” option to buy and sell more shares, issued to investment banks underwriting the deal, is fully exercised, the company said in a sales prospectus.
CNOOC, China’s largest offshore oil producer, priced its Shanghai offering at 10.8 yuan ($1.69) per share, a 13% premium to its Hong Kong share price on Friday. It said it would use the share sale proceeds to fund one gas and seven oilfield projects in China and overseas, and to replenish capital.
The firm’s Hong Kong shares fell 3.3% in Hong Kong on Monday morning, more than the 2.5% drop in the benchmark Hang Seng index.
The Shanghai sale comes after CNOOC was delisted last year by the New York Stock Exchange after Washington added the firm to a trade blacklist citing suspected connections to the Chinese military.
State-backed rivals PetroChina and Sinopec are already listed in Shanghai.
It also comes as a number of Chinese companies have paused Shanghai listing plans citing disruption to business life in the city, under lockdown to fight China’s biggest coronavirus outbreak in two years.
CNOOC seeks to take advantage of soaring global oil prices as Russia’s war on Ukraine pushes up already high energy prices. CNOOC expects first-quarter profit to jump by 62% to 89% from a year earlier, after registering record profit, and output in 2021.
CNOOC priced its Shanghai offering, which will make the top 10 of China’s listing if the greenshoe option is fully exercised according to Refinitiv data, at 23.88 times earnings, or 1.05 times net assets.
• Reuters with additional editing by Jim Pollard
ALSO on AF:
CNOOC Hikes 2022 Output Goal, Sees Oil Peak By 2030
Trump’s ‘decoupling’ continues as NYSE delists China’s state oil company
NYSE set to remove China’s CNOOC from board
