Hammerhead plans rare U.S. listing of Canadian gas producer in over $1 bln SPAC deal

The Nasdaq brand is displayed on the Nasdaq Market web site in Occasions Sq. in New York Metropolis, U.S., December 3, 2021. REUTERS/Jeenah Moon

Sept 26 (Reuters) – Hammerhead Assets Inc plans to checklist on the Nasdaq by merging with clean examine firm Decarbonization Plus Acquisition Company IV (DCRD.O) in a C$1.39 billion ($1.02 billion) deal, a uncommon U.S.-listing for a Canadian oil and gasoline producer.

The itemizing for Hammerhead, targeted on the Montney shale formation in Alberta, could be a litmus check for investor confidence within the Canadian oil and gasoline manufacturing enterprise, as for years overseas personal fairness gamers and oil majors have been exiting the oil patch on account of a myriad of points.

The merger additionally comes at a time when the frenzy round listings by way of the SPAC route have wound down after practically two years of immense recognition. A SPAC usually raises cash by way of an preliminary public providing, then seems for an organization to purchase.

Particular objective acquisition firm Decarbonization raised $275 million in August final 12 months and stated it was on the lookout for a goal targeted on creating a platform that decarbonizes probably the most carbon-intensive sectors, together with power, agriculture, industrials and transportation.

The cope with Hammerhead, backed by personal fairness agency Riverstone Holdings, is predicted to shut within the first quarter subsequent 12 months and generate gross proceeds of about $320 million, assuming minimal redemptions.

Hammerhead intends to make use of the funds to speed up its carbon seize and sequestration (CCS) program and ship substantial manufacturing and money circulate progress over the subsequent a number of years.

Its decarbonization funding marketing campaign throughout its asset base is estimated to require $240 million of capital between 2023 and 2029.

The mixed firm, to be listed on Nasdaq and commerce underneath “HHRS”, can be managed by Hammerhead’s present govt staff led by Chief Govt Officer Scott Sobie.

CIBC Capital Markets and Peters & Co. Restricted are appearing as monetary and capital markets advisers to Hammerhead.

($1 = 1.3652 Canadian {dollars})

Reporting by Mehnaz Yasmin in Bengaluru; Enhancing by Shinjini Ganguli

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