Opti Canada hires new adviser

Tue Feb 1, 2011 5:04pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Opti Canada Inc, under financial pressure due to persistently weak oil sands output, said on Tuesday it has hired a new financial adviser to assist in a search for strategic options, which include asset sales or finding a buyer for the company.

Debt-heavy Opti, which has a minority stake in Nexen Inc's Long Lake oil sands project, said Lazard Freres & Co LLC will help Scotia Waterous Inc and TD Securities Inc. They have been working on strategic options since 2009.

"Lazard will supplement the strategic review by providing advice on capital structure alternatives to address the company's overall leverage position," it said in a statement.

Opti shares fell 35 percent to 45 Canadian cents on Tuesday on the Toronto Stock Exchange, a new low. They are down 77 percent in the past 12 months.

The shares had last taken a hit in mid-December, when Standard & Poor's cut its ratings on Opti debt, citing a deteriorating financial position.

The announcement, made after the stock was halted, would be a letdown for any investor who thought a sale might be in the offing, Canaccord Genuity analyst Phil Skolnick said.

Opti's high debt levels and operational problems at Long Lake, where it has a 35 percent stake, have hampered its attractiveness as a takeover target, Skolnick said.

"The problem they face is that there are just so many choices up there if you want access to oil sands," he said.   Continued...