OPTI Canada expects second-lien notes, share sale to close in November

By Caroline Salls

Pittsburgh, Oct. 27 - OPTI Canada Inc. expects to close the sale of its second-lien notes and shares to subsidiaries of CNOOC Ltd. by the end of November, according to a company news release.

"The parties are prepared to complete the acquisition promptly following the receipt of approvals from Industry Canada and the People's Republic of China," OPTI president and chief executive officer Chris Slubicki said in the release.

OPTI said in the release that a no-action letter was issued from the Commissioner of Competition under the Competition Act of Canada on Oct. 19, satisfying a condition to closing.

As previously reported, the total value of the acquisition is $2.1 billion.

Under the acquisition, the CNOOC subsidiaries will:

• Acquire OPTI's second-lien notes for a net cash payment of $1.179 billion and pay $37.5 million to backstop parties;

• Acquire all existing issued and outstanding common shares of OPTI for a cash payment of $34 million, equal to $0.12 per common share; and

• Assume the company's first-line notes in accordance with the indenture.

In addition, OPTI said it plans to request an extension from the Court of Queen's Bench of Alberta of its Companies' Creditors Arrangement Act stay period beyond the current Nov. 4 stay deadline in order to complete the acquisition or recapitalization.

According to the release, OPTI Canada reported a $290 million net loss for the quarter ended Sept. 30 on $87 million in net revenues.

In comparison, the company posted a $26 million net loss for the quarter ended Sept. 30, 2010 on $59 million of net revenues.

The net loss for the first nine months of this year was $371 million on $245 million of net revenues, compared with a $211 million net loss posted for the nine months ended Sept. 30, 2010 on $170 million of net revenues.

OPTI Canada is a Calgary, Alta.-based company focused on developing oil-sands projects.

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