Sino Australia Oil & Gas Defers IPO After ‘Market Volatility’
Sino Australia Oil & Gas Ltd. (SAO), a Chinese drilling services company, deferred a proposed initial public offering in Sydney by as much as three months after a period of “market volatility” in Asia.
Sino Australia, based in Daqing in northeast China, plans to complete the offer by Oct. 4 and to start trading by Oct. 25, Wayne Johnson, a Sydney-based director, said today by phone. That compares with its previous expectation of July 5 after which it requested an extension.
The company expects to raise A$15 million ($14 million) to A$20 million, Johnson said. The company said in May it plans to sell 24 million shares at 50 cents a share to raise A$12 million, while a further A$8 million in shares may also be sold.
Sino Australia last month sought an extension from the Australian Securities and Investments Commission to give Asian fund managers more time to decide to buy shares. The company plans to sell stock in Australia to give local investors exposure to China’s surging energy demand.
“Recent market volatility was cited as the reason Asian-based fund managers were not able to complete investment mandates,” the company said July 16. Sino Australia received “commitments” from investors that would allow the company to raise the minimum A$12 million, it said last month.
Australia’s S&P/ASX 200 Index (AS51) dropped 11 percent between a May 14 high and June 25, according to data compiled by Bloomberg. The index has risen 10 percent since June 25.
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