Sa­pura En­ergy tum­bles on Mokhzani’s exit

The Myanmar Times - Weekend - - International Business -

SHARES of Sa­pura En­ergy fell more than 9% in early Thurs­day trade fol­low­ing re­port that Tan Sri Mokhzani Ma­hathir is dis­pos­ing off his en­tire stake in oil and gas ser­vices com­pany.

This is the second time Mokhzani is of­fload­ing its stake in an oil and gas firm. In 2015, Mokhzani’s pri­vate ve­hi­cle, Khasera Baru Sdn Bhd sold off a block of 190.3 mil­lion shares in Sa­pu­rak­en­cana Pe­tro­leum Bhd for close to Rm820mil in to­tal.

In­dus­try play­ers said Mokhzani’s exit did not come as a sur­prise. They added that Mokhzani be­lieved the oil and gas in­dus­try was a global is­sue and prefers to re­de­ploy his re­sources in other in­vest­ments.

Mokhzani through Khasera Baru has a 10.10% stake in Sa­pura En­ergy.

Ac­cord­ing to a term sheet, Mokhzani is look­ing to sell up to Rm905.1mil of Sa­pura En­ergy shares. The book­build­ing range for the of­fer rep­re­sents 605 mil­lion Sa­pura En­ergy shares was be­tween RM1.42 and RM1.49 a share.

The price range rep­re­sents an 8% to 12.3% dis­count to Sa­pura En­ergy’s clos­ing price of RM1.62 on Wed­nes­day ahead of the book­build­ing launch.

Khasera Baru will not own any Sa­pura En­ergy shares af­ter the sale.

Sa­pura En­ergy de­clined 8.02%, or 13 sen to RM1.49 with more than 50.5 mil­lion shares changed hands at 12.19pm. The stock rose 1.4% in the past month. It is cur­rently trad­ing at 185 times trail­ing 12-month earn­ings per share and 82 times its es­ti­mate next year.

In a re­cent re­port, RHB Re­search said Sa­pura En­ergy may likely face con­tin­ued chal­lenges in FY18, as it grap­ples with lower earn­ings from its drilling seg­ment.

“The out­look for its en­gi­neer­ing and con­struc­tion (E&C) and en­ergy seg­ments, how­ever, re­mains pos­i­tive,” it said, adding that the or­der­book for E&C re­mains sta­ble while re­plen­ish­ment con­tin­ues to be ro­bust.

“Its en­ergy seg­ment is look­ing for­ward to its first gas pro­duc­tion in 3QFY18, which would pro­vide a re­cur­ring base of in­come.

“Main­tain ‘buy’, with a lower Sop-based tar­get price of RM2 (from RM2.20, 39% up­side) as we ad­just our as­sump­tions on its drilling unit’s con­tri­bu­tions and its bal­ance sheet,” RHB said.

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