Tourmaline Oil Corp. didn't waste much time after its initial public offering to come back to the market. On Monday, the rising oil and gas star tapped investors for $36-million.
To get around its lock-up provision following the IPO, which prevents the company from issuing new equity at a discount, Tourmaline sold the deal only to private investors and offered up only flow-through shares, which are typically sold at a premium. In this case, the shares came at a 22 per cent premium.
Moreover, flow-through offerings always have a specific use of proceeds and the money has to be put to use before the end of the year.
Had there been no lock-up, Tourmaline surely could have raised more cash. This deal was upsized from $30-million to $36-million and there would have been room for more, bankers say, if only the flow-through market were bigger.
Peters & Co. led the offering, which comes just a few months after the October IPO.