Sunshine Oilsands Gets OK for World's Biggest IPO

HONG KONG (Dow Jones Newswires), Jan. 17, 2012

Canada's Sunshine Oilsands Ltd. received Hong Kong regulatory approval last week for a US $500 million to US $700 million Hong Kong initial public offering, people familiar with the situation said Tuesday, making it the latest Canadian energy company to tap funds via a listing in the territory.

The Calgary-based oil-sands company plans to start gauging investor interest in its offering after the Chinese New Year Holiday starting on Jan. 23 and list its shares on the Hong Kong stock exchange in February, the people said.

If successful, Sunshine Oilsands will be the world's biggest IPO to date this year. Chinese health care company Xizang Haisco Pharmaceutical Group Co Ltd., which raised US $127 million in early January in Shenzhen, is currently the biggest, according to Dealogic. Hong Kong--which kept its title as the world's No. 1 venue for new listings for a third year--raised around US $36 billion last year, ahead of New York, according to Dealogic.

Sunshine Oilsands's listing plans come after the city's stock market finished at its highest in more than two months Tuesday, spurred by a sharp rise in China shares on surprisingly strong fourth-quarter economic data. The blue chip Hang Seng Index ended up 3.2% Tuesday. There was also optimism over the mainland government's efforts to improve liquidity in the securities markets.

Sunshine Oilsands, a private Canadian company, owns and controls 4,600 square kilometers of oil-sands leases in the Athabasca oil sands of Alberta, according to the company's Web site.

Ahead of the planned listing, Sunshine Oilsands raised C$230 million through investments from China Life Insurance (Overseas) Company Ltd., Bank of China Group Investment Ltd., Cross-Strait Common Development Fund Co., and several other investors, the company said in March.

China, the world's second-largest oil consumer after the U.S., has also been investing aggressively in Canada's energy sector to fuel its rapidly growing economy. Chinese investment in oil sands has jumped as crude prices surged last year amid the global economic recovery.

Last year, state-owned China Petrochemical Corp. bought a 9% stake in Syncrude, Canada's largest oil-sands project, for US$4.65 billion. In 2009, PetroChina Co. purchased a stake in an Athabasca Oil Sands Corp. project for C$1.9 billion.

Most of the oil-sand reserves in Canada are in deposits that require heat, steam or chemicals to separate the bitumen.

The company has hired Bank of China International Holdings Ltd., Morgan Stanley and Deutsche Bank to handle the listing, the people said.

Copyright (c) 2012 Dow Jones & Company, Inc.


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