Plans for an IPO for marginal field-developer BW Energy have been pushed back – and pricing scaled back – in light of financial volatility, blamed on the coronavirus in China.
The company’s parent BW Offshore had intended to complete its bookbuilding process on February 7, but had pushed this back. It now expects the offer to close on February 17, with a reduced valuation for the unit of $500 million, versus the previously targeted $700mn. The first day of trading should be February 19.
It had hoped to sell equity worth $175mn gross, but has trimmed this now to $125mn. The BW Group will subscribe for $25mn in the offering under the revised terms.
BW Offshore said volatility in the financial markets and lower oil prices had taken their toll, based on the coronavirus outbreak. Scaling back the ambition of its offering should ensure it still secures a successful IPO, it said, while maintaining its “operational and financial targets”.
The offering will result in a similar free float and ownership as under the original terms, it said. Shares will be priced at 24.4 krone ($2.6), down from the previous plan of around 35 krone ($3.78). It will issue 46.9mn shares, rising to 53.9mn if the greenshoe option is exercised.
With listing costs of around $8mn, this should provide $117mn net to the company. The greenshoe would see the gross amount increase to $143.75mn.
BW Offshore intends to pay out a special dividend in the form of BW Energy shares. This will be around $65-100mn, it said. Following the IPO and dividend distribution, the free float of BW Energy shares will be 23.7-25%, rising to 26-27.2% if the greenshoe is exercised.
A supplemental prospectus will be published on February 14.
BW Energy has a 73.5% stake in Gabon’s Dussafu permit and a 95% stake in Brazil’s Maromba field. It also has a marginal gas field offshore Namibia, which has proved more challenging to commercialise.