Mainland giant will use proceeds from first convertible bond to fund acquisitions in two gas projects
The mainland's dominant offshore oil and gas producer CNOOC is looking to raise up to US$1 billion with its first convertible bond by cashing in on investors' expectations of continued high oil prices.
The company intends to use the proceeds to finance its acquisitions in the Tangguh gas project in Indonesia and Australia's Gorgon gas project, according to sources.
CNOOC yesterday launched a US$750 million five-year, zero-coupon convertible bond in the international capital market. It had exercised an option to increase it by US$100 million and could raise it a further US$150 million, a source said.
Holders will have the right to convert the bond into new CNOOC common shares in five years.
The conversion price was set at $6.07, a 35.7 per cent premium to the $4.475 closing price of the stock yesterday. This was at the low end of the indicative premium of 35.7 per cent to 45.8 per cent, and a conversion price range of $6.07 to $6.52 offered to investors.
CNOOC's share price has surged 47.2 per cent this year, helped by expectations that oil prices will remain high for longer than previously thought because of political instability in oil-producing countries and strong global demand.
