BW Energy's initial public offering valuation has been reduced by $200m, which the company has blamed on the Covid-19 coronavirus' impact on oil prices.
The exploration and production company's IPO was valued at $700m when it was announced in January.
But this figure has been cut to $500m "to reflect the current market fundamentals", parent company BW Offshore said on Thursday.
"The offering period has coincided with significant volatility in the global financial markets due to the outbreak of the coronavirus in China, which has also triggered a material downward movement in the oil price," the firm said in an exchange filing.
The IPO will spin off BW Energy from its parent BW Offshore, which currently holds 68.6% of its share capital.
Reduced equity offering
BW Energy had hoped to raise around $275m in the IPO through an offering of new shares.
However, on Thursday BW Offshore said the company would be "comfortably financed" with a reduced equity offering of $125m.
Net proceeds from the offering are estimated to be $117m, excluding over-allotment, after transaction costs of around $8m.
Shares had been priced at between NOK 34.20 and NOK 36.60 each in January, but this has been discounted to NOK 24.40 each.
BW Group has decided to subscribe for $25m in the offering on the revised terms "to support a successful completion of the IPO", BW Offshore said in its filing.
Over-allotment option
More could be raised if the equity offering's joint global coordinators elect to over-allot additional shares equivalent to up to 15% of the final number of offer shares sold.
An extra $18.75m could be raised if the over-allotment option is exercised in full, which could bring the final total of the equity offering up to $143.75m, BW Offshore said.
"The company has a strong pipeline of projects which will deliver long term value creation for both existing and new shareholders, and BW Energy has consequently decided to adjust terms to enable a successful IPO and to maintain its operational and financial targets," BW Offshore said on Thursday.
BW Energy's offering is expected to expire when markets close in Oslo on Monday, following an extended bookbuilding and application period.
The shares are expected to be listed on the Oslo Stock Exchange next Wednesday under the ticker BWE.
DNB Markets, part of DNB Bank, and Pareto Securities are acting as joint global coordinators and joint bookrunners in the offering.
Arctic Securities, Danske Bank (Norway), Nordea Bank and Swedbank are acting as co-managers.
