Sapura Energy opts for stake sale rather than IPO for upstream unit

PETALING JAYA: Sapura Energy Bhd president and CEO Tan Sri Shahril Shamsuddin said yesterday it will look at selling a stake in Sapura Upstream Sdn Bhd, rather than a listing exercise, for certainty in timing and valuation.

The group’s share price, which has taken a beating ever since it announced a rights issue to raise RM4 billion, was up two sen yesterday to 35.5 sen with some 126.2 million shares changing hands, making it the most actively traded stock.

The stock has fallen 77.81% for the last one year, underperforming the FBM KLCI, which has gained 2.9% in the last one year.

Yesterday, the group announced it has signed a heads of agreement (HoA) with Austria’s OMV Aktiengesellschaft (OMV AG) to exclusively negotiate the sale of a 50% interest in Sapura Upstream, based on an enterprise value of US$1.6 billion (RM6.64 billion).

“We have explored all options including the potential listing of our upstream business. The invitation to enter into this strategic partnership with a leading oil and gas player serves our goals and aspirations better while providing certainty in timing and valuation,” Shahril said.

OMV AG is one of Austria’s largest listed industrial companies with group sales of 20 billion (RM96 billion) and more than 20,000 employees.

The proposed strategic partnership will comprise Sapura Energy’s portfolio of commercially viable gas assets offshore Sarawak, its acreage in new markets in New Zealand, the Gulf of Mexico and Australia.

Shahril said the partnership with OMV AG complements the group’s continued strategy to grow its portfolio and expand acreage position.

“OMV AG’s existing footprint offers new opportunities for our upstream segment and increases market reach for our services segment where OMV operates,” he added.

Furthermore, Shahril said the partnership will sharpen Sapura Energy’s competitive advantage by leveraging on the strength of its portfolio of commercially viable gas fields offshore Sarawak and its acreage in new markets in New Zealand, Gulf of Mexico and most recently, Australia.

“In addition, OMV AG will benefit from Sapura Energy’s in-house capabilities,” he added.