SAPURA ENERGY BHD

By AmInvestment Bank Buy (maintained) Fair value: RM0.55

PERMODALAN Nasional Bhd (PNB) is set to become Sapura’s largest shareholder with an equity stake of up to 40% (from 12% currently) following the completion of the group’s proposed renounceable rights issue of up to RM4bil.

This involves 30 sen rights shares on a fivefor-three basis with one free warrant for every 10 rights shares subscribed with new Islamic redeemable convertible preference shares (RCPS) at 41 sen per RCPS to be allocated on a ratio of two RCPS-to-five shares.

As this exceeds the mandatory takeover threshold of 33%, PNB is applying for an exemption to undertake a general offer for the remaining shares.

PNB has given an undertaking letter to Sapura to subscribe for its rights entitlement and the excess shares and warrants not taken up by the other shareholders, up to an equity stake of 40% in the group.

This could mean that PNB will be taking up to 57% of the rights share offering.

PNB will also subscribe for the entire RM1bil RCPS offering.

Assuming full conversion at the end of the RCPS’ five-year maturity, PNB’s stake could rise further to 48%.

However, AmInvestment Bank understands that Sapura intends to fully redeem the RCPS before its maturity.

President and CEO Tan Sri Shahril Shamsuddin via Sapura Technology Sdn Bhd has also given an undertaking to subscribe for a miniumum rights entitlement of RM300mil.

Maybank Investment Bank and Credit Suisse have given an undertaking to subscribe for the remaining RM1bil rights shares not subscribed by PNB or Shahril, which means that the proposed rights exercise is a “done deal”.