Keyfield seeks to enlarge fleet post-ipo
Company to provide more offshore accommodation
“We strive to continuously contribute positively to the industry by offering a comprehensive range of quality accommodation vessels and services that conform to industry health, safety and environmental guidelines.”
Darren Kee Chit Hue
KUALA LUMPUR: Main Market-bound oil and gas services company Keyfield International Bhd, which aims to raise Rm188.1mil from its initial public offering (IPO), has set its sights on fleet expansion.
Executive director and group chief executive officer Datuk Darren Kee Chit Hue said the company is eyeing for two additional vessels, having already acquired one in January.
Keyfield, which is an offshore accommodation provider, presently operates 11 Malaysian-flagged vessels with capacities ranging from 50 to 500 persons.
Citing independent market researcher Providence Strategic Partners Sdn Bhd, Kee said the group holds a market share of about 23% currently, based on the total number of days a year that Malaysianflagged accommodation work boats were chartered.
He said the group aims to strengthen its market share, in line with the expansion of its fleet.
“After we repay the various instruments used to buy the few vessels in the past, we will be in a good position to generate cash from our order book and we intend to use part of that to potentially look at the new vessels,” Kee told a press conference in conjunction with the launch of the prospectus for its IPO, yesterday.
With an IPO price of 90 sen per share, Keyfield is set to debut on the Main Market on April 22.
For the first nine months of its financial year 2023, the company registered a utilisation rate of 82% compared with 62.4% in the previous year’s corresponding period.
In addition, Kee said the group aims to broaden its service offerings, which include the chartering of anchor handling tug and supply vessels that can also serve as smaller-sized accommodation vessels to meet the growing demands of the local oil and gas industry.
“We strive to continuously contribute positively to the industry by offering a comprehensive range of quality accommodation vessels and services that conform to industry health, safety and environmental guidelines,” he said.
Kee said the company has an order book of Rm662mil, indicating strong demand for its services in the foreseeable future.
A substantial portion of the IPO proceeds will go towards addressing bank borrowings related to past vessel acquisitions.
Kee said the funds will primarily be allocated to redeeming Keyfield’s cumulative redeemable non-convertible preference shares (CRNCPS) and settling the balance for the purchase of two vessels – Blooming Wisdom and Keyfield Helms 1.
“The CRNCPS were previously issued to acquire three vessels, Keyfield Compassion, Keyfield Commander and Keyfield Grace. The remaining proceeds will be utilised for the repayment of bank borrowings, working capital and listing-related expenses,” he said.
Keyfield will utilise 32.7% or Rm61.5mil of the proceeds for the redemption of the CRNCPS, while about 34.6% or Rm65mil is earmarked for settlement of the balance of the purchase of Blooming Wisdom.
Another 18.6% or Rm35mil will be used for the settlement of the balance for the purchase Keyfield Helms 1, while about Rm3mil or 1.6% will be set aside for repayment of bank borrowings.
This will result in savings in finance costs of between Rm10mil and Rm12mil, according to Kee.
The remaining Rm14.56mil or 7.7% will be used for working capital, while Rm9mil will be for estimated listing expenses.
POST-IPO, Keyfield anticipates improvement in its financial position, with its projected gearing ratio dropping from 1.3 times to 0.14 times, alongside a reduction in borrowings to Rm69.5mil from Rm333mil.