Athabasca Oil Sands Corp. will make a $1.35-billion debut on the Toronto Stock Exchange next week, among the largest Canadian initial public offerings ever.
The offering is almost twice as large as expected when it was announced earlier this year, owing largely to strong interest from Asian institutional investors based on the endorsement of Athabasca's major backer, PetroChina Co. Ltd.
Athabasca will price the offer at $18 a share, which is at the top end of estimates. The energy company was expected to set the price on a $750-million debut last week, but the timing was delayed as orders continued pouring in, reaching about $2-billion.
That left a number of investors unable to get in on a hot offering in an industry recovering from the recession.
"It's a good start," said Tom Pavic, vice-president of Calgary-based Sayer Energy Advisors. "It's a good sign for the oil sands, which has been on the back burner with the declining price of oil."
The underwriting agreement, led by Morgan Stanley and GMP Securities, is for 75 million shares, generating proceeds of $1.35-billion, the Calgary-based company said late yesterday. The IPO is expected to grow to $1.5-billion by the time the deal closes, as the underwriters use their option to purchase additional Athabasca shares.
All of the money raised in this IPO is earmarked for developing Athabasca's six properties in Alberta.
Last year, state-owned PetroChina bought a 60-per-cent stake in two Athabasca Oil Sands projects, for $1.9-billion.
Andrew Willis