Oil tycoon Kaiser aims to reopen U.S. IPO market with Excelerate listing

3 minute read
Register now for FREE unlimited access to Reuters.com

April 4 (Reuters) - Excelerate Energy Inc, which provides floating terminals to allow the importing of liquefied natural gas (LNG), on Monday announced plans for an initial public offering which would be the first major U.S. listing since the invasion of Ukraine.

Founded in 2003 by oil and gas tycoon George Kaiser, Excelerate Energy aims to raise up to $384 million through an IPO that could value the Texas-based LNG company at about $2.54 billion.

Operating in Brazil, Argentina, Israel, United Arab Emirates, Pakistan and Bangladesh, Excelerate expects to list on the New York Stock Exchange under the ticker symbol "EE". The company intends to sell 16 million shares of its Class A common stock in the offering, priced between $21 and $24 apiece.

Register now for FREE unlimited access to Reuters.com

Energy stocks have surged in 2022 as commodity prices hit multi-year highs: the S&P energy index (.SPNY) is up 38% this year versus a 4% decline in the S&P 500 (.SPX).

New U.S. listings dried up after Russia's invasion on Feb. 24, which Moscow calls a special operation. IPOs had already slowed as investors swallowed heavy losses from 2021 listings and equity markets sold off in anticipation of U.S. interest rate hikes.

As the conflict has dragged on, the Cboe market volatility index, known as Wall Street's fear gauge, has eased. It was at 19.23 on Monday, close to the 10-week low it hit last week.

Kaiser will indirectly hold a majority of the voting power in Excelerate after the offering, through the ownership of majority shareholder EE Holdings' Class B common stock.

EUROPE OPPORTUNITIES

U.S. investors have targeted names with LNG exposure since the invasion, betting these companies will benefit from Western sanctions on Russia, which supplies Europe with between 30% to 40% of its gas.

Excelerate generated about 40% of its revenue from the Americas last year, followed by Asia Pacific and the Middle East and North Africa. Since the invasion, it has had more inquiries from countries traditionally dependent on Russian gas imports, the company said in an updated filing with the U.S. Securities and Exchange Commission on Monday.

"Although these discussions are in early stages, we are optimistic that there could be increased opportunities to serve the European market," the filing said.

The document also noted that movements in price spreads between different LNG markets were creating a headwind for Excelerate, while sanctions on Russia were exacerbating a squeeze in finding workers for its floating infrastructure.

In 2021, Excelerate generated a net income of $41.2 million on revenue of $888.6 million, around 47% of which came from the sale of LNG and natural gas.

Barclays, J.P. Morgan and Morgan Stanley are the lead underwriters of the offering.

Register now for FREE unlimited access to Reuters.com
Reporting by Sohini Podder in Bengaluru and David French in New York; Editing by Sriraj Kalluvila and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.