Chinese offshore operator CNOOC Ltd has said it "regrets" the decision by the New York Stock Exchange (NYSE) to delist the company’s American depositary shares after Washington late last year added the company to the list of entities with links to the Beijing government.
“The company regrets the NYSE’s decision and actions…Shareholders of the company and prospective investors are advised to exercise caution when dealing in the securities of the company,” CNOOC Ltd said in a statement to the Hong Kong Stock Exchange.
In the meantime, CNOOC Ltd is “assessing the impact of the situation and will closely monitor relevant development of the situation".
On 26 February, NYSE authorities decided to commence proceedings to delist CNOOC Ltd’s American depositary shares.
CNOOC Ltd’s shares will be suspended from trading on the NYSE at 4:00 am local time on 9 March.
The NYSE will apply to the US Securities & Exchange Commission to delist the CNOOC Ltd’s American depositary shares upon completion of all applicable procedures, including any appeal (if filed) against the decision, the NYSE has said.
Late last year, The US Office of Foreign Assets Control (OFAC) of the Department of the Treasury added CNOOC Ltd to the list of Chinese companies with alleged ties to the country's military.
CNOOC Ltd said earlier that, since its 2001 listing, it has “strictly complied with the laws, regulations and regulatory requirements of its listing venues and has been operating in accordance with laws and regulations".
While there is no clear criteria from OFAC as to what constitutes ties to the Chinese military, the sanction is seen by market observers as linked to wider moves by the previous US administration of Donald Trump against Chinese businesses.
Trump signed an executive order in November last year, while still president, banning US businesses from investing in companies on the Department of Defence's list.
As of 26 February 2021, CNOOC Ltd’s ordinary shares represented by ADSs amounted to about 0.5% of its total issued share capital.
For the year ended 31 December 2020, the average daily trading volume of the ADSs on the NYSE accounted for about 14.5% of the total average daily trading volume of CNOOC Ltd’s securities listed on Hong Kong Stock Exchange, NYSE and the Toronto Stock Exchange.
CNOOC Ltd said the NYSE’s decision and actions may affect the trading prices and volumes of its securities.