Business
Vaar Energi shares fall after $7.9 billion Eni spin-off
Published by maria gbaf
Posted on February 17, 2022
Editorial & Advertiser disclosure
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
OSLO (Reuters) – Shares of Vaar Energi, the largest pure-play oil exploration and production (E&P) company to list globally in almost a decade, fell 4.9% as it made its Oslo stock market debut on Wednesday.
A spin-off from Italy’s Eni, Vaar declined to 26.64 crowns from 28 crowns in the initial public offering (IPO), which had valued the group at 69.9 billion crowns ($7.85 billion).
It had pared some losses to trade at 27.50 crowns by 1114 GMT.
Taking advantage of soaring petroleum prices, Eni last month announced plans to float Vaar on Euronext Oslo, one of several moves by the Italian energy group to free up cash from legacy fossil fuel businesses to fund a green drive.
Petroleum industry IPOs have been a tough sell in recent years, however, with high-profile companies including Wintershall DEA and Neptune Energy repeatedly postponing listings.
Vaar on Monday announced the IPO price would be set at the low end of the company’s intended range of 28-31.50 crowns, giving it a value of 69.9 billion crowns before Wednesday’s fall.
Bookrunners involved in the listing said this made Vaar the most valuable E&P company to conduct an IPO since 2013. Euronext said the company was Norway’s third largest stock market entrant of all time.
At 28 crowns per share the IPO had been “substantially oversubscribed”, Vaar said. The company attracted some 19,000 new shareholders, including institutional investors from Europe, the United States and Asia, as well as Nordic retail buyers.
The company this month raised its projected 2022 dividend to a minimum of $800 million from $700 million.
“We have set ambitious growth targets and our cash flow and solid balance sheet support attractive, resilient distributions to our shareholders,” CEO Torger Roed said in a statement.
Vaar produced around 247,000 barrels of oil equivalent a day in the third quarter of 2021 and targets around 350,000 barrels per day by the end of 2025.
Eni and minority owner HitecVision sold an 11% stake for 7.7 billion crowns.
In the coming weeks, lead managers may raise the overall size of the deal to 12.7% via an overallotment option.
Eni will remain majority owner with a stake of between 63.5% and 64.3%.
Banks involved in the IPO were DNB Markets, JP Morgan, Morgan Stanley, SpareBank 1 Markets, ABG Sundal Collier, BofA Securities, Carnegie, Jefferies and Pareto Securities.
($1 = 8.8991 Norwegian crowns)
(Reporting by Terje Solsvik and Nerijus Adomaitis; editing by Gwladys Fouche and Jason Neely)