SERI KEMBANGAN: Sapura Energy Bhd is in talks with several international firms for a potential strategic partnership or disposal of part of its drilling business, said president and group CEO Tan Sri Shahril Shamsuddin.
He said the potential partnership will be similar to the recently signed deal with OMV Aktiengesellschaft, under which it is selling 50% stake of its exploration and production (E&P) subsidiary Sapura Upstream Sdn Bhd to the Austrian firm.
“It is quite similar to the OMV deal, it is the other company seeking us,” he told reporters after its EGM today.
On how much of its drilling business it intends to sell, Shahril said it would depend on the price and quality of the potential partner. He said the deal must also enable the group to penetrate new markets and provide access to new equipment at competitive prices.
The group currently has 16 assets under its drilling business, comprising eight semi-tender rigs and eight tender assist rigs, with a utilisation rate of 35%. Shahril said these assets are “young” with an average of 15 to 20 more years to go.
Drilling is one of Sapura Energy’s three core businesses, the other two being E&P and engineering and construction (E&C).
For the E&C and drilling businesses, Sapura Energy has won contracts worth RM7.1 billion to date, of which RM3.5 billion are local and RM3.6 billion are abroad, including Saudi Arabia, Mexico, India as well as Australia, Africa and others.
The group’s total order book stands at RM18.2 billion, of which RM4.4 billion will be recognised this financial year ending Jan 31, 2019 (FY19). About RM5.4 billion will be recognised in FY20 while RM8.4 billion will be recognised from FY21 onwards.
At the EGM, shareholders approved its plans for a rights issue to raise up to RM4 billion, which will be used to pare down debt. Shahril said the EGM was very smooth due to the solid backing it received from institutional funds.
The exercise will raise RM3 billion through the rights issue of ordinary shares with free warrants and RM1 billion through the rights issue of Islamic redeemable convertible preference shares.
Sapura Energy’s share price fell 1.45% or half sen to close at 34 sen today with 26.04 million shares done.