Nova jumped 57 Canadian cents to C$1.95 on the Toronto Stock Exchange on a heavy volume of 21.7 million shares, nearly 23 times the three-month average. Its New York-listed shares rose 52 cents to $1.62. Earlier, the stock shot up more than 103 percent.
The Globe and Mail newspaper said on its website that there was speculation the company, Canada's biggest manufacturer of raw plastics, may have struck a deal with an Alberta government-owned institution.
The report quoted market sources as saying the rescue package could be in the form of a bond issue that would be bought by pension plan manager Alberta Investment Management Corp. It said ATB Financial, the provincially owned bank, was also speculated to be providing a loan.
However Leo de Bever, chief executive of the fund manager, which manages C$70 billion ($57 billion) in Alberta public sector pensions, said "there is no such thing in the works."
"It's an interesting idea but there's nothing going on," de Bever said.
Shawn Ohler, a spokesman with ATB Financial, also said it has held no talks with Nova on funding for the company.
A Nova spokesman also would not confirm a deal.
"We are aware of the story and I can tell you we haven't made any further financing announcements," Nova's Greg Wilkinson said. "Our statement continues to be that we continue to be confident in our ability to work with our lenders going forward."
The speculation also fueled gains in Nova's debt. Its 7.4 percent notes due this year have climbed 21 cents on the dollar to 74.5 cents, traders said. Meanwhile, Nova's 6.5 percent notes due 2012 have gained 10.5 cents on the dollar to 38 cents, according to KDP Investment Advisors.
Nova is a major employer in Alberta and it has extensive assets in the Western Canadian province, including a massive ethylene and polyethylene complex in the central Alberta town of Joffre.
Earlier this week, Nova's shares tumbled after three bond rating agencies downgraded the company's debt on renewed worries about its liquidity amid the petrochemical industry's sharp downturn.
The company has a series of debt maturities coming due over the next 18 months, starting with a $250 million bond repayment in April.
Standard & Poor's pointed out Nova has to raise $100 million by the end of this month and another $100 million by June 1.
Also on Wednesday, Moody's Investors Service lowered its rating on some of Nova's debt from B2 from Ba3 and said most of the company's ratings are under review for possible downgrade.
"The two notch downgrade reflects the increasing liquidity risk and the onerous terms under the new bank amendment," John Rogers, a senior vice-president at Moody's, said in a statement. "The ratings could be lowered in the next two weeks, if the company is unable to conclude the current negotiation for additional capital."
Nova has said it won relaxations on some its debt covenants that give it access to its credit lines in the first half of this year, but it continues to seek financing.
Last week, Nova reported a deep fourth-quarter loss, and a 36 percent drop in revenues, as demand for its plastic products weakened.
($1=$1.23 Canadian)
(Additional reporting by Tom Ryan in New York; editing by Rob Wilson)
Alberta (Reuters)
The Globe and Mail newspaper said on its website that there was speculation the company, Canada's biggest manufacturer of raw plastics, may have struck a deal with an Alberta government-owned institution.
The report quoted market sources as saying the rescue package could be in the form of a bond issue that would be bought by pension plan manager Alberta Investment Management Corp. It said ATB Financial, the provincially owned bank, was also speculated to be providing a loan.
However Leo de Bever, chief executive of the fund manager, which manages C$70 billion ($57 billion) in Alberta public sector pensions, said "there is no such thing in the works."
"It's an interesting idea but there's nothing going on," de Bever said.
Shawn Ohler, a spokesman with ATB Financial, also said it has held no talks with Nova on funding for the company.
A Nova spokesman also would not confirm a deal.
"We are aware of the story and I can tell you we haven't made any further financing announcements," Nova's Greg Wilkinson said. "Our statement continues to be that we continue to be confident in our ability to work with our lenders going forward."
The speculation also fueled gains in Nova's debt. Its 7.4 percent notes due this year have climbed 21 cents on the dollar to 74.5 cents, traders said. Meanwhile, Nova's 6.5 percent notes due 2012 have gained 10.5 cents on the dollar to 38 cents, according to KDP Investment Advisors.
Nova is a major employer in Alberta and it has extensive assets in the Western Canadian province, including a massive ethylene and polyethylene complex in the central Alberta town of Joffre.
Earlier this week, Nova's shares tumbled after three bond rating agencies downgraded the company's debt on renewed worries about its liquidity amid the petrochemical industry's sharp downturn.
The company has a series of debt maturities coming due over the next 18 months, starting with a $250 million bond repayment in April.
Standard & Poor's pointed out Nova has to raise $100 million by the end of this month and another $100 million by June 1.
Also on Wednesday, Moody's Investors Service lowered its rating on some of Nova's debt from B2 from Ba3 and said most of the company's ratings are under review for possible downgrade.
"The two notch downgrade reflects the increasing liquidity risk and the onerous terms under the new bank amendment," John Rogers, a senior vice-president at Moody's, said in a statement. "The ratings could be lowered in the next two weeks, if the company is unable to conclude the current negotiation for additional capital."
Nova has said it won relaxations on some its debt covenants that give it access to its credit lines in the first half of this year, but it continues to seek financing.
Last week, Nova reported a deep fourth-quarter loss, and a 36 percent drop in revenues, as demand for its plastic products weakened.
($1=$1.23 Canadian)
(Additional reporting by Tom Ryan in New York; editing by Rob Wilson)
Alberta (Reuters)
