Update on the BWE IPO Process
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BW ENERGY LIMITED: UPDATE ON THE BWE IPO PROCESS
13 February 2020
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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Further details about the Offering, and the revised terms thereof, are set out in the supplemental prospectus (the "Supplemental Prospectus") prepared by the Company in connection with the Offering which is expected to be approved by the Norwegian Financial Supervisory Authority on 13 February 2020 and published prior to 09:00 hours (CET) on 14 February 2020. The information included in the Supplemental Prospectus is to be considered an integral part of, and is to be read together with, the full offering prospectus published by the Company and dated 29 January 2020 (the "Prospectus").
Applicants that have applied for Offer Shares at the time of publication of the Supplemental Prospectus have the right to withdraw their application within two working days after the publication of this Supplemental Prospectus, cf. Article 23 of the Prospectus Regulation. Such applications may be withdrawn prior to 16:30 hours (CET) on 17 February 2020. Applications may be withdrawn by contacting the Manager with whom the application was made or, with respect to investors who have applied for Offer Shares through the VPS' online application system, by contacting either of the Joint Global Coordinators. Investors that have applied for Offer Shares before the publication of the Supplemental Prospectus and who have not utilized the right to withdraw their application within the two-day deadline described above, will be deemed to have accepted the above-mentioned supplemental information and revised terms, and will not need to submit a new application.
The Prospectus and the Supplemental Prospectus will, subject to regulatory restrictions in certain jurisdictions, be available at www.bwenergy.no, www.dnb.no/emisjoner, www.paretosec.com/transactions, www.arctic.com/secno/en/offerings, www.danskebank.no/bwe and www.swedbank.no. Hard copies of the Prospectus and the Supplemental Prospectus may also be obtained free of charge by contacting the Company or one of the Managers.
DNB Markets, a part of DNB Bank ASA and Pareto Securities AS are acting as joint global coordinators and joint bookrunners in the Offering (the "Joint Global Coordinators"). Arctic Securities AS, Danske Bank (Norwegian Branch), Nordea Bank Abp (filial i Norge) and Swedbank AB (publ) (in cooperation with Kepler Cheuvreux) are acting as co-managers (the "Co-Managers", and together with the Joint Global Coordinators, the "Managers").
Advokatfirmaet Thommessen AS is acting as Norwegian legal counsel to the Company and Conyers Dill & Pearman Limited is acting as special Bermuda legal counsel to the Company. Advokatfirmaet Schjødt AS is acting as Norwegian legal counsel to the Managers.
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For further information, please contact:
Knut Sæthre, CFO BW Energy, +47 91 11 78 76, ir@bwenergy.no
Ståle Andreassen, CFO BW Offshore, +65 97 27 86 47
Anders S. Platou, Head of Corporate Finance BW Offshore, +47 99 50 47 40
ABOUT BW ENERGY
BW Energy is a growth E&P company with a differentiated strategy targeting proven offshore oil and gas reservoirs through low risk phased developments. The Company has access to existing FPSOs to reduce time to first oil and cash-flow with lower investments than traditional offshore developments. The main assets are 73.5% of the producing Dussafu Marine Permit offshore Gabon and a 95% interest in the Maromba field in Brazil, both operated by the Company. Total net 2P+2C reserves are 247 million barrels at the start of 2020 and gross average production from Dussafu was 11,779 bbl/day in 2019.
ABOUT BW OFFSHORE
BW Offshore is a leading provider of floating production services to the oil and gas industry. The company also participates in developing proven offshore hydrocarbon reservoirs. BW Offshore is represented in all major oil and gas regions world-wide with a fleet of 15 owned FPSOs. The company has more than 30 years of production track record, having executed 40 FPSO and FSO projects. BW Offshore is listed on the Oslo Stock Exchange.
Not for distribution in or into the United States, Australia, Canada, the Hong Kong Special Administrative Region of the People's Republic of China or Japan.
Important notice
These materials do not constitute or form a part of any offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "EU Prospectus Regulation" means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (together with any applicable implementing measures in any Member State).
In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Transaction.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Company's shares.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Company's shares and determining appropriate distribution channels.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.
This announcement is made by and, and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein.
Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.
Each of the Company, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.