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Oilexco shares plunged following the announcement. After being halted on Nov. 18, they resumed trading at midday on Thursday and dropped C$1.04, or 42 percent, to C$1.45 on the Toronto Stock Exchange. Volume was 26.5 million, nearly seven times the average over the past three month.
The company, whose shares have dropped 93 percent since the end of June, also said it has hired investment bankers Morgan Stanley to advise it on strategic alternatives, including "mezzanine and debt financing, industry and financial partnerships together with other financing alternatives," it said.
However Morgan Stanley's hiring does not mean the company has put itself up on the block, an Oilexco spokesman said.
"We are not for sale," Rob Elgie said. "We are not shopping the company around.
Oilexco had planned to issue five-year convertible debentures carrying a 15 percent coupon as well as issue the shares at a price of C$2.25 each.
The firm has been searching for ways to pay for its exploration programs in Britain's North Sea since early October, when it said it was having difficulty closing a financing it had arranged with the troubled Royal Bank of Scotland.
The company said in a release that its board canceled the plan to issue stock and debt because "in the current market conditions the proposed offering was determined ... to be overly dilutive to shareholders and does not reflect the value of the company's assets."
($1=$1.30 Canadian)
(Reporting by Scott Haggett; editing by Rob Wilson) Keywords: OILEXCO/ (scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com @reuters.net; +1 403 531-1622)
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