Sumatec plans rights issue to raise RM52.24m

PETALING JAYA: Sumatec Resources Bhd is planning to place out 348.27 million new shares, or 10% of its issued and paid-up share capital, to raise RM52.24 million to finance its upstream oil and gas (O&G) operations in Kazakhstan.
In a stock exchange filing last Friday, Sumatec said it intended to place out the shares to independent third party investors.
Sumatec, 24.5% owned by Tan Sri Halim Saad, said that the indicative issue price is 15 sen per placement share which is a 4.40% discount to its weighted average market price (WAMP) up to and including Oct 22, 2015.
"The proposed private placement will enable the company to raise the necessary funds for its capital expenditure at the Rakushechnoye oil and gas field and general working capital without incurring additional interest costs as compared to other means of financing, such as through bank borrowings or the issuance of debt instruments.
"Further, given the current economic climate and the volatility in global oil prices, the board is of the view that it would be prudent for the company to use equity to fund Sumatec's operations at the Rakushechnoye oil and gas field," Sumatec said.
It said the placement proceeds would be used to finance expenses related to drilling of new O&G production wells and enhancement of existing entities.
It hopes to complete the private placement by end of this year.