Perisai Petroleum lays out plan to cut debt and raise cash

PETALING JAYA: Practice Note 17 Perisai Petroleum Teknologi Bhd (PPTB) on Friday announced that its plans to cancel off accumulated losses, issue shares and irredeemable and redeemable unsecured loan stocks to settle debt and a rights issue to raise funds to focus its business on the oil drilling rig of the group and the FPSO (floating production storage and offloading) unit, namely Perisai Kamelia, as part of its business rationalisation exercise.
PPTB listed a capital reduction and share consolidation to eliminate its accumulated losses; issuance of shares, irredeemable and redeemable unsecured loan stocks to settle RM1.67 billion in debt; proposed bilateral settlements for another RM627.8 million of inter-company debt; proposed bilateral settlements for operating subsidiaries’ lenders of RM1.4 billion, liquidation of subsidiaries and a rights issue to raise up to RM22.34 million funds for part of its debt settlement and working capital of the regularised group.
The proposed capital reduction will work to offset its accumulated losses, which figures at RM962.83 million as at June 30, 2017.
Perisai said its rights issue will involve the issuance of 223.39 million rights shares at an issue price of 10 sen per rights share on the basis of one rights share for every 2.94 existing Perisai shares held on an entitlement date to be determined later.
In the event of under-subscription of the proposed rights issue, Perisai Petroleum will place out up to 85.88 million placement shares at an issue price of 10 sen per placement share to Sage 3 Capital Sdn Bhd and third party investors to be identified, which is expected to raise at least another RM8.59 million.
It involves a proposed bilateral settlement to settle the outstanding liabilities owed by Perisai to the inter-company creditors namely Perisai Capital (L) Ltd, Garuda Energy (L) Ltd and Intan Offshore (L) Ltd.
With the completion of the proposed bilateral settlements for Garuda Energy, Intan Offshore and Perisai Capital, all three companies are to be wound up. The winding-up of the subsidiaries is in line with the plans of PPTB Group to focus its business on PP101 Rig, being the oil drilling rig of the group and Perisai Kamelia.