BW Offshore: Update on the BWE IPO Process

BW-Offshore

Reference is made to the announcements by BW Energy Limited (“BW Energy”, “BWE” or the “Company”) and BW Offshore Limited (“BW Offshore” or “BWO”) on 29 January 2020 regarding the initial public offering of the shares in BW Energy (the “IPO”, the “Offering”) and the listing of the BW Energy shares on the Oslo Stock Exchange (the “Listing”), on 30 January 2020 regarding the commencement of the bookbuilding and application period for the Offering as well as on 6 February 2020 regarding the extension of the bookbuilding and application period for the Offering.

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 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.

Based on its current growth plans, the Company is comfortably financed with a reduced equity offering of USD 125 million. In order to reflect the current market fundamentals, the Company is also reducing the offering valuation from approximately USD 700 million to USD 500 million. BW Group Limited has decided to subscribe for USD 25 million in the Offering on the revised terms. Combined with dividend shares from BW Offshore, the Company will have a similar free float and ownership split at the revised terms compared to the initially contemplated terms.

The Company will file a prospectus supplement with the Norwegian FSA today and expects the Offering to close on Monday 17 February 2020 at 16:30 hours (CET).

SUMMARY OF REVISED TERMS

Price per Share: NOK 24.40

Number of Shares to be issued: 46,904,200 Shares (in total 53,939,830 Shares if the Greenshoe Option is exercised in full)

Extension of the Bookbuilding Period to 17 February 2020 at 16:30 hours (CET)

Extension of the Application Period to 17 February 2020 at 16:30 hours (CET)

First day of Listing: 19 February 2020

DETAILS OF THE REVISED TERMS OF THE OFFERING

The Company has, in consultation with the Joint Global Coordinators, adjusted the Offering to consist of an offer of 46,904,200 Shares (excluding over-allotment) at a fixed offer price of NOK 24.40 (the “Offer Price”) raising gross proceeds of NOK 1,144,462,480 (equivalent to approximately USD 125 million at the Offer Exchange Rate). Assuming transaction costs of approximately USD 8 million, net proceeds (excluding over-allotment) are estimated to be USD 117 million (equivalent to NOK 1,071,216,900 at the offer exchange rate).

In addition, the Joint Global Coordinators may elect to over-allot a number of Shares equal to up to 15% of the number of Offer Shares sold in the Offering. Including over-allotment, the Offering will consist of an offer of a total of 53,939,830 Shares raising gross proceeds of NOK 1,316,131,852 (equivalent to approximately USD 143.75 million at the Offer Exchange Rate).

The potential over-allotment and the Joint Global Coordinators’ potential stabilization activities after the IPO will continue to be facilitated by a borrowing option from BW Offshore and a greenshoe option from BW Energy.

EXTENSION OF BOOKBUILDING AND APPLICATION PERIOD

The bookbuilding period in the institutional tranche of the Offering and the application period in the retail trance of the Offering are extended so that they both expire on 17 February at 16:30 hours (CET).

The Company, in consultation with the Joint Global Coordinators, may extend the Bookbuilding Period and the Application Period at any time and for any reason, and extension may be made on one or several occasions. The Bookbuilding Period and the Application Period may in no event be extended beyond 16:30 hours (CET) on 24 February 2020. In the event of an extension of the Application Period and/or the Bookbuilding Period, the allocation date, the payment due date and the date of delivery of Offer Shares will be changed accordingly. Any extension of the Bookbuilding Period and/or the Application Period will be announced by the Company through a stock exchange release on www.newsweb.no prior to 09:00 hours (CET) the first trading day following the last day of the Bookbuilding Period and Application Period.

NEW SUBSCRIPTIONS BY PRIMARY INSIDERS

BW Group Limited (“BW Group”), the second largest shareholder in BWE after BWO as well as the largest shareholder in BWO, will subscribe for a total amount of USD 25 million to support a successful completion of the IPO. BW Group’s subscription may be scaled back in the allocation in order to facilitate a broadening of the shareholder base and an increased free float. Assuming that BW Group receives full allocation, BW Group will hold 66,470,873 shares in BW Energy, equivalent to approximately 27.54% of the Shares in the Company (assuming full exercise of the Greenshoe Option, but not including the Shares to be received by BW Group in the BW Offshore Dividend Distribution (as hereinafter defined)).

NEW TIMETABLE

Bookbuilding Period ends: 17 February 2020 at 16:30 hours (CET)

Application Period ends: 17 February 2020 at 16:30 hours (CET)

Allocation of the Offer Shares: On or about 17 February 2020

Publication of the results of the Offering: On or about 17 February 2020

Issuance of allocation notes: On or about 18 February 2020

Accounts from which payment will be debited in the Retail Offering to be sufficiently funded: On or about 18 February 2020

Payment date in the Retail Offering: On or about 19 February 2020

Delivery of the Offer Shares in the Retail Offering (subject to timely payment): On or about 20 February 2020

Payment date in the Institutional Offering: On or about 20 February 2020

Delivery of the Offer Shares in the Institutional Offering: On or about 20 February 2020

The first day of listing and commencement trading in the Shares: On or about 19 February 2020

BW OFFSHORE DIVIDEND DISTRIBUTION

As communicated previously, BW Offshore will distribute a number of Shares in BW Energy as dividend in kind to its shareholders (the “BW Offshore Dividend Distribution”). BW Offshore will determine the amount of the dividend distribution and the number of Shares to be distributed (the “Dividend Shares”) upon allocation of the Offer Shares and it is expected to be in the range of USD 65 million (equivalent to approximately 24.4 million Shares) to USD 100 million (equivalent to approximately 37.5 million Shares).

FREE FLOAT

It is expected that the free float of the Company’s shares following completion of the Offering and the BW Offshore Dividend Distribution, will be in the range between approximately 23.7% and 25.0% of the shares in the Company, depending on the allocation to BW Group and the number of Shares distributed in the BW Offshore Dividend Distribution, and assuming that the Greenshoe Option is not exercised. If the Greenshoe Option is exercised in full, the free float is expected to be in the range between approximately 26.0% and 27.2%.

 

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