RIP OPC:
Shares in oilsands junior Opti plummet, stock halted on Toronto Stock Exchange
2/1/2011 10:04:00 AM | Canadian Press (English)
CALGARY - Shares in indebted oilsands junior Opti Canada Inc. tumbled by more than 27.5 per cent on the Toronto Stock Exchange on Tuesday.
Nearly 15.6 million shares had traded hands — with the stock down 19 cents at 50 cents — before the issue was halted on the TSX pending news.
In August, Calgary-based Opti (TSX:OPC) added US$400 million to its already debt-laden balance sheet.
For well over a year, the company has been undergoing a strategic review, which could include a sale of the entire company. As of yet, the firm has not disclosed any potential bidders.
Opti owns a 35 per cent stake in the Long Lake oilsands project, with Nexen Inc. (TSX:NXY) controlling the rest. But the companies have had trouble ramping up production from the steam-driven project due to a number of operational issues.
Some observers' views of Opti's future have been downbeat.
"We believe that there is a high probability that the company elects not to make its June interest payment to bondholders and enters into a corporate restructuring process before the end of June," RBC Dominion Securities analyst Mark Friesen said in a note to clients this week.
John Stephenson, with First Asset Investment Management in Toronto, said in an recent interview: "It looks like at some point Opti is going to be in bankruptcy this year unless a white knight rides to the rescue.
"I'm not sure why one would, given that the reservoir (Long Lake) really hasn't performed as billed. And if it doesn't happen this year, I think they'll run out of cash," Stephenson said.
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