SERI KEMBANGAN: The undersubscription of Sapura Energy Bhd’s rights issue was due to unfavourable sentiment, said its president and group CEO Tan Sri Shahril Shamsuddin.
“The sentiments during the rights issue was a bit muddled because we had so many conflicts. There was conflict between the US and China and there were issues on trade globally, and that caused a lot of foreign investors to be a little bit shy,” he told reporters at the EGM today.
He said local investors, particularly institutional investors, were also affected by the uncertainty of the recovery of the oil and gas market.
“Unless you are in the business, you cannot see the increase in activities. I think a lot of this was going around,” he added.
However on the positive side, Shahril said Permodalan Nasional Bhd (PNB), which emerged as the largest shareholder with a 40% stake, sees the potential in Sapura Energy and this places the company on very strong footing to go through a growth phase.
Sapura Energy’s rights issue exercise saw an undersubscription rate of 18.51% after its share price fell below its rights issue price of 30 sen but the company managed to raise about RM4 billion as the remaining 1.85 billion unsub-scribed rights shares will be fully taken up by the joint underwriters.
The joint underwriters are Maybank Investment, CIMB Investment Bank and RHB Investment Bank.
The company announced last week that it received 8.14 billion of valid acceptances and excess applications for its rights shares with warrants, representing a subscription rate of 81.5%.
For its Islamic redeemable convertible preference shares, the group saw just above 100% of valid acceptances and excess applications. PNB and its associated funds emerged as the single largest shareholder with 40% shareholding in the company.
In tandem with the rights issue, Sapura Energy will be forming a 50:50 strategic partnership with Austria’s OMV Aktiengesellschaft (OMV AG), which was approved by shareholders at the EGM today.
Shahril said the exercise will be completed in a few days, after which it will receive the proceeds, which will be used to pare down our debts and partially for working capital.
Upon completion of the rights issue and joint venture, Sapura Energy’s gearing ratio will drop from 1.74 times to 0.62 times, which Shahril said is a good level for the amount of activities the company has.
“This will give us the headroom to execute bigger projects because we’ll need more working capital and to try and go back to the days where we are able to increase our turnover and move towards possible profitability as soon as possible,” he added.
He said the company is well capitalised, has low debt level and is poised for growth in both the exploration and production, and services segments.
