CNOOC regrouped after a failed 1999 IPO and raised US$1.2bn in a 2001 dual listing

In October 1999, CNOOC Limited's planned US$2.5bn dual listing in Hong Kong and New York was canceled about 55 hours before launch when the lead underwriter recommended pulling the under-subscribed issue. Overseas investors worried about Chinese state-owned corporate governance and pricing (CEIBS case study).

CNOOC regrouped instead of giving up. In 2000 it issued 557,575,755 new shares to eight unaffiliated entities at US$0.825 per share, raising about Rmb3,769.7m net after expenses, which brought in strategic partners before the public offering (SEC 20-F).

On February 27-28, 2001, CNOOC listed 1,442,426,000 shares at HK$6.01 on the Stock Exchange of Hong Kong and as ADSs on the New York Stock Exchange, plus 214,163,900 shares on the over-allotment in March. Net IPO proceeds were about Rmb10,101.6m (US$1,220.5m) (SEC 20-F).

People's Daily reported the stock closed the morning session up from its issue price, with the international offer about five times subscribed - a stark reversal from the 1999 failure.

February 2001 dual listing on NYSE and HKEX netted about Rmb10,101.6m (US$1,220.5m) after expenses; the international offer was about five times subscribed.

The failed 1999 roadshow showed pricing and governance, not the asset, were the problem.

Strategic placements in 2000 gave the IPO credibility and cash before the public offer.

A smaller, re-priced 2001 offering matched investor demand instead of forcing a US$2.5bn deal.

Dual HK/NY listing imposed disclosure standards that answered SOE governance worries.

When investors reject an SOE, fix the perceived problem instead of forcing the deal: CNOOC brought in foreign strategic investors and re-priced the offer before returning to the market.

CNOOC Limited used the listed vehicle to fund offshore production growth and later international acquisitions, becoming China's largest offshore oil and gas producer. The 2001 listing became the reference for subsequent Chinese oil and energy IPOs, showing that a failed first attempt could be retried successfully after restructuring.