Eni spin-off Vaar Energi priced at bottom of IPO range

Norwegian oil and gas firm Vaar Energi, a spin-off from Italy’s Eni , said its planned stock market listing in Oslo will value the company at 70 billion crowns ($7.8 billion), the low end of the company’s intended range.

Eni last month announced its intention to float Vaar on Euronext’s Norwegian stock market, one of several moves by the Italian energy group to free up cash from legacy fossil fuel businesses to fund its green drive.

A decision to fix the price at 28 Norwegian crowns was made in consultations with owners and financial advisors, the company said on Monday.

Vaar on Feb. 4 said shares in the initial public offering (IPO) would be sold at between 28 and 31.5 crowns each, valuing the company at between 70 billion and 79 billion crowns.

Petroleum industry IPOs have been a tough sell in recent years, however, with high-profile companies including Wintershall DEA and Neptune Energy repeatedly delaying listings.

But oil and gas prices have recently surged, offering majority owner Eni, which holds 69.85% of Vaar, and private equity investor HitecVision, which holds the remaining 30.15%, a chance to sell some of their holdings.

The offering comprised 8.8% of Vaar’s shares, with an option to increase the size of the IPO to 12.7% of the stock.

“The offering, including the over-allotment option, is multiple times covered at the offer price,” Vaar said, while adding that the IPO bookbuilding will still remain open to investors until a Tuesday deadline.

Trading in the shares is due to begin on Wednesday.

Banks involved in the IPO are DNB Markets, JP Morgan, Morgan Stanley, SpareBank 1 Markets, ABG Sundal Collier, BofA Securities, Carnegie, Jefferies and Pareto Securities.

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. The company recently raised its projected 2022 dividend to a minimum of $800 million from $700 million, with a planned first-quarter payout of $225 million, up from $200 million projected earlier.

($1 = 8.8752 Norwegian crowns)

Source: https://www.reuters.com/business/energy/eni-spin-off-vaar-energi-be-priced-bottom-ipo-range-2022-02-14/