RAK Petroleum, a leading oil and gas investment company in the UAE, is set to proceed with plans for an initial public offering and application for listing in Norway.

Prior to the listing, RAK Petroleum will transfer substantially all of its assets, liabilities and business to a new UK company, RAK Petroleum plc, as part of a reorganisation approved by the shareholders in May last year, said a statement.

RAK Petroleum plc will be the listing entity with shareholders of RAK Petroleum receiving shares in the new entity pro rata to their current shareholding, it said.

The shares of RAK Petroleum plc are expected to commence trading on Oslo Børs, alternatively Oslo Axess on November 7.

The existing shareholders of RAK Petroleum will be allotted restricted shares and an associated number of founder shares in RAK Petroleum plc 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), said the statement.

The size of the offering is approximately 20 million Norwegian kroner ($3.02 million) and it is expected that up to 1.6 million new shares will be issued under the offering - up to 0.5 per cent of the total shares outstanding post listing, it said.

The shares will be offered only to the retail market in Norway commencing today (October 28) with an offer price range set between 12.48 and 15.25 Norwegian kroner.  

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

Bijan Mossavar-Rahmani, RAK Petroleum’s chairman of the board and chief executive officer, said: “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.

“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 said.  

“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.

The Financial Supervisory Authority of Norway has approved the prospectus prepared in connection with the offering and listing, said the statement.

ABG Sundal Collier Norge ASA (global coordinator) and DNB Markets are acting as joint lead managers for the offering, it added. - TradeArabia News Service