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Tourmaline taps market quickly after IPO

Tourmaline Oil Corp. didn't waste much time after its initial public offering to come back to the market. On Monday, the rising oil and gas star tapped investors for $36-million.

To get around its lock-up provision following the IPO, which prevents the company from issuing new equity at a discount, Tourmaline sold the deal only to private investors and offered up only flow-through shares, which are typically sold at a premium. In this case, the shares came at a 22 per cent premium.

Moreover, flow-through offerings always have a specific use of proceeds and the money has to be put to use before the end of the year.

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Had there been no lock-up, Tourmaline surely could have raised more cash. This deal was upsized from $30-million to $36-million and there would have been room for more, bankers say, if only the flow-through market were bigger.

Peters & Co. led the offering, which comes just a few months after the October IPO.

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

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