Suncor Energy Slides After Announcing $2 Billion Equity Raiseby
Oil producer says proceeds to cut debt, may fund acquisitions
Timing seems ‘odd’ given Suncor plans to sell assets: analyst
Suncor Energy Inc. slid the most in a week a day after the oil-sands producer announced it would sell about C$2.5 billion ($2 billion) in additional equity.
The Calgary-based oil explorer slipped as much as 3.2 percent to C$35.35 and traded at C$35.70 as of 9:50 a.m. in Toronto. The stock is little changed this year.
Suncor said on Tuesday that it would sell 71.5 million shares at a price of C$35 apiece. The money will lower debt and help pay for the C$937 million acquisition it announced in April to increase its stake in the Syncrude oil-sands joint venture. The proceeds may also fund “opportunistic growth transactions," the company said in a statement.
Given that Suncor is still planning to sell assets, the timing of the share sale may strike investors as “a bit odd," Tyler Reardon, an analyst at Peters & Co. in Calgary, wrote in a research note Wednesday. “The fact that the company is raising equity is not totally unexpected, but the timing and its commentary on the use of proceeds does come as a surprise."