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28 March 2024

Rak Petroleum launches Dh11m IPO in Norway

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By Staff

Ras Al Khaimah Petroleum (Rak Petroleum), the UAE-based oil and gas investment firm, today announced that it is launching initial public offering (IPO) in Norway.

In a press statement, the company said the size of the offering is approximately NOK20 million (Dh11.14m) and it is expected that up to 1,602,564 new shares will be issued under the offering, up to 0.5 per cent of the total shares outstanding post listing.

Shares will be offered only to the retail market in Norway commencing on October 28, 2014.

The offer price range has been set between NOK12.48 (Dh7) and NOK15.25 (Dh8.5).

The final offer price will be determined based on the market value of Rak Petroleum’s holding of shares in DNO ASA less a 35 per cent discount which is offered to ensure sufficient retail interest and listing on Oslo Børs, alternatively Oslo Axess.

Prior to the listing, Rak Petroleum will transfer substantially all of its assets, liabilities and business to a new UK company as part of a reorganisation approved by the shareholders in May 2013.

Rak Petroleum will be the listing entity with shareholders of Rak Petroleum receiving shares in the new entity pro rata to their current shareholding.

Subject to approval of the listing application and successful completion of the offering, the shares of Rak Petroleum are expected to commence trading on Oslo Børs, alternatively Oslo Axess on November 7, 2014.

The existing shareholders of Rak Petroleum will be allotted restricted shares and an associated number of founder shares in Rak Petroleum corresponding to 90 per cent of their shareholding in Rak Petroleum, with the remaining 10 per cent to be allotted in unrestricted shares.

The unrestricted shares will be freely tradable but the restricted shares are subject to lockup for six months following the listing (other than to certain permitted transferees or with the Joint Lead Managers’ consent).

“Given market conditions that have severely depressed share prices in the oil and gas sector, we limited the size of the offering to the minimum necessary to attract sufficient numbers of Norwegian shareholders to allow us to proceed with the listing,” said Bijan Mossavar-Rahmani, Rak Petroleum’s Chairman and CEO.

“Once listed, as markets recover we expect to have the flexibility to launch more meaningful offerings at prices that more accurately reflect our underlying assets and our growth prospects,” he added.

“In the meantime, we expect that a few hundred Norwegian investors will pick up our shares at very attractive discounts and that’s fine, too,” Mossavar-Rahmani said.

Completion of the offering is conditional upon the board of directors of Oslo Børs approving the listing application and the satisfaction of the conditions for admission to trading, including (a) attracting in excess of 500 shareholders with Norwegian VPS accounts or 100 shareholders in the case of a listing on Oslo Axess, each holding shares with a value of more than NOK 10,000 and (b) reaching a minimum free float of the shares of 25 per cent.

ABG Sundal Collier Norge ASA (Global Coordinator) and DNB Markets are acting as Joint Lead Managers for the offering.