Sunshine Oilsands Ltd. is putting its much anticipated $700-million initial public offering on hold, according to the Wall Street Journal.
For months, investors wondered when Sunshine would finally go public, and just last week reports started to come out stating that it would finally launch in Hong Kong. However, the company quickly realized the appetite in Asia just isn’t there, and there is speculation that opting to go public in Hong Kong instead of Canada may be coming back to haunt the company.
The WSJ reports that Sunshine was supposed to start fielding IPO orders on Monday, but has now postponed its marketing roadshow indefinitely. Apparently people in Hong Kong just couldn’t wrap their heads around Canada's oil sands, and investors were scared away because the company remains unprofitable.
Still, it is a little odd that investor appetite is so weak because Hong Kong markets are doing well this year, with the benchmark Hang Seng Index up 13 per cent in 2012.
Postponing the deal raises two questions. Would Sunshine would have more success in Canada? And will the firm re-consider its plan to go public abroad?