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US investment vehicle Silver Run flat in debut
[NEW YORK] Shares of Silver Run Acquisition Corp, a US investment vehicle aimed at funding the acquisitions of energy companies, were flat at US$10 in their trading debut on Wednesday.
The company raised a greater-than-expected US$450 million in an initial public offering on Tuesday, indicating that some investors believe the energy sector's corporate valuations have hit a bottom.
Shares of many energy companies have been clobbered in the past few months by a steep slump in crude oil prices. Silver Run will look for companies that are "fundamentally sound" but underperforming due to slumping commodities prices, according to its IPO prospectus.
Silver Run is a blank-check acquisition company sponsored by energy-focused private equity firm Riverstone Holdings LLC. Such so-called special-purpose acquisition companies (SPACs) fund the equity portion of their acquisitions through stock issuance.
Silver Run, whose offering is the largest so far this year in the United States, priced 45 million units at US$10 each, selling 5 million more units than it originally planned.
Each unit consists of one share of Class A common stock and a third of one warrant, according to the company's filing.
Deutsche Bank Securities, Citigroup and Goldman, Sachs & Co were underwriters on the offering of the company run by oil and gas veteran Mark Papa.
KLR Energy Acquisition Corp, another blank-check company aimed at building oil and gas exploration and production business, announced plans to go public last month.