Boost for Sapura Energy
Investors react positively to company’s RM4bil rights issue
PETALING JAYA: The market has given Sapura Energy Bhd its seal of approval, following the oil and gas firm’s announcement to seek shareholders’ approval for its proposed rights issue, which will see it raise RM4bil to pursue growth and pare down debts.
It told shareholders via a circular on Bursa Malaysia yesterday that it intended to issue 9.9 billion new ordinary shares at an issue price of 30 sen, together with 998 million free detachable warrants on the basis of five rights shares for every three Sapura Energy shares held.
The stock jumped to as high as 40.5 sen before closing up 1.5 sen at 37 sen, still far from it 52-week high of RM1.50.
Its trading volume was the highest in the market yesterday with some 289 million shares changing hands.
A second proposal will involve a renounceable rights issue of up to 2.396 billion new Islamic redeemable convertible preference shares (RCPS-i) in Sapura Energy at an issue price of 41 sen on the basis of two RCPS-1 for every five Sapura Energy shares held.
Both exercises will see firstly, RM3bil raised through the rights issue of ordinary shares with free warrants and another RM1bil raised, via the rights issue of Islamic redeemable convertible preference shares (RCPS-i), the company said.
Shareholders will meet on Nov 29 with regard to the proposals.
Sapura Energy said in the circular that after taking into consideration the recovery of the oil and gas industry, it has formulated a strategic plan that will enable its business segments to operate independently.
The plan includes both these proposals and may also involve a strategic partnership for its exploration and production business.
The primary objective of the proposals, it added, was to reduce the borrowings of the group to strengthen its balance sheet.
The stronger balance sheet would enable it to bid and undertake higher value projects globally and benefit the group in terms of savings in financing cost arising from lower borrowings of about RM174.2mil per annum.
Crude oil price had recovered in recent times but has since fallen again in the past one month. The benchmark WTI crude oil has dropped from US$76.03 a barrel on Oct 3 to just over US$62 a barrel now mainly due to oversupply concerns.
Uptrend: An employee walks past Sapura Energy logo at its headquarters in Kuala Lumpur. The stock jumped to as high as 40.5 sen before closing up 1.5 sen at 37 sen.