Dual listings between Norway and Singapore have been dealt another blow with BW Offshore delaying its plans indefinitely.
The Oslo-based firm told Channel NewsAsia the current market conditions raised questions about the need for such move.
More oil exploration and production are expected to take place further out at sea, and this will drive demand for offshore vessels used for the processing and storage of oil.
BW Offshore makes those vessels, and sees significant demand coming from Asia.
Its regional growth plans had included a dual listing on the Singapore Exchange (SGX).
Earlier plans set the date in the first half of the year but this was pushed back to the second half of the year.
Now, it looks like it is back hanging in the air.
BW Offshore CEO Carl Arnet said: “We have looked at the success, or probably more accurately, the lack of success of some of the dual listings when liquidity has not been supplied to the market.
“For a market to function you need a certain liquidity.”
Despite an agreement over two years ago between Norway and Singapore to promote dual listings, there is currently only one.
Many were hoping BW Offshore’s dual listing would pave the way for more.
But for now, it plans to stay on the sidelines until the situation improves because it has no urgent need to raise capital.
With the current market downturn, it believes current valuations will also be unfavourable.
However, plans to eventually list in Singapore have not been scuppered.
“We have not changed our strategy. In the long term we need to and we want to address the Asian capital market because our industry is extremely capital intensive,” Mr Arnet said.
According to shipping bank DnB NOR, it is currently in talks to help more than 10 companies to dual list.
DnB NOR regional director, head of Asia Erik Borgen said: “Just now there is this turmoil so it is very hard for any company to raise capital, and that doesn’t mean that it won’t come back.
“When it comes back there is definitely opportunity for this maritime sector.”
For now though, dual listing looks set to be stuck in the doldrums.
Source: CNA
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