‘Vote in favour of MGO exemption’

PETALING JAYA: UMW Oil & Gas Corp Bhd’s (UMW-OG) independent adviser Mercury Securities Sdn Bhd has advised non-interested directors and non-interested shareholders of UMW-OG to vote in favour of the proposed exemption for Permodalan Nasional Bhd, Amanah Saham Bhd and persons deemed to be acting in concert with (PAC) from undertaking a mandatory general offer (MGO) at an EGM on Aug 25.

“Premised on the evaluation of the proposed exemption on a holistic basis, we are of opinion that, on the basis of the information available to us, the exercise is fair and reasonable,” Mercury said.

Mercury said the exemption, if granted, will allow UMW-OG to undertake a recapitalisation exercise if it, too, is approved by the shareholders of UMW-OG.

UMW-OG’s parent UMW Holdings Bhd is distributing its 55.7% shareholding in UMW-OG to its shareholders, as part of its plan to exit the oil and gas industry. The PAC group is the controlling shareholder of UMW-OG with a combined 45.48% stake in UMW-OG (after the distribution), which will in turn trigger an MGO.

Mercury said if shareholders vote against the exemption, UMW-OG will not be able to undertake the proposals, including a rights issue with warrants.

Accordingly, the part repayment of bank loans and refinancing exercise will not materialise, it said. UMW-OG will not be able to realise the potential benefits of the proposals and will continue to have the current level of borrowings, and it will need to seek alternative ways to alleviate the short-term liquidity pressures, Mercury said.