Boost for Sa­pura En­ergy

In­vestors re­act pos­i­tively to com­pany’s RM4­bil rights is­sue

The Star Malaysia - StarBiz - - News -

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.

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