By Sarah Kent and Alexis Flynn
LONDON--Nigerian oil company Seplat Petroleum said Tuesday it is
planning a $500 million initial public offering on stock exchanges
in London and Nigeria next month, potentially the largest flotation
by an oil exploration and production company in Europe since the
global financial crisis.
Seplat, which is hoping to list in mid-April, currently produces
around 60,000 barrels of oil a day from three oil blocks it bought
from Royal Dutch Shell in 2010. It plans to float around 25% of the
company, giving it a market value of up to $2 billion. Its Nigerian
founders will remain its largest shareholders, along with French
energy company Maurel & Prom SA. Swiss-based trader Mercuria
Energy Group also holds a minority stake in Seplat.
A listing for Seplat would go some way to reviving London's
reputation as center for IPOs of emerging-market resource
companies. Such flotations have proved controversial in recent
years after high-profile corporate governance scandals at mining
companies Bumi PLC and Eurasian Natural Resources Corp. PLC.
The U.K. regulator last year tightened its rules for so-called
premium listings, which require higher standards of corporate
governance for companies looking to float. Seplat, though, isn't
seeking a premium listing as that would force it to move its
headquarters to London. As a result, Seplat won't be included in
benchmark indexes such as the FTSE 250.
"We are a Nigerian company and very proud of that fact. We would
like to remain a Nigerian company," said Dr. AB Orjiako, Seplat's
chairman. Dr. Orjiako said Seplat would voluntarily apply the
standards required of a premium listing.
Seplat plans to use the float proceeds primarily to fund
acquisitions, though $48 million would be used to pay off a
shareholder loan. The company is one of several Nigerian companies
seeking to grow through acquisitions as large international oil
companies retreat from their holdings in the country's onshore oil
sector.
Seplat is one of the final bidders for assets Shell is selling
in the Niger Delta and has been selected by Chevron Corp. to buy
its onshore assets in Nigeria.
"We are very strongly interested in Shell's assets: We believe
that Seplat is very well positioned to develop them," said Dr.
Orjiako. He declined to comment on the status of Seplat's
acquisition of Chevron's assets because of a continuing lawsuit
related to the sale.
Write to Sarah Kent at sarah.kent@wsj.com and Alexis Flynn at
alexis.flynn@wsj.com
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