PETALING JAYA: Yinson Holdings Bhd’s indirect wholly owned subsidiary Yinson Acacia Ltd was awarded a letter of intent (LoI) by Enauta Energia SA (Enauta) for the provision, operation and maintenance of a floating, production, storage and offloading (FPSO) asset in the Atlanta Field located in the Santos Basin, offshore Brazil for US$505 million (RM2.1 billion).
The award includes a two-year operations and maintenance agreement, with a further increase to US$1.98 billion inclusive of five years extension period, should Yinson exercise the call option.
The LoI comes with a call option exercisable by Yinson to acquire the asset-owning company of the project with a 15-year time-charter agreement and operation and maintenance agreement of the same duration, with Enauta having a right to extend the terms of these agreements by a further five years.
The FPSO will be Yinson’s third project award in Brazil, with the earlier two awarded assets on track for completion in 2023 and 2024 respectively.
Meanwhile, Yinson has proposed a 1-for-1 bonus issue for issuance of up to 1,112,540,173 bonus shares.
It has also proposed a renounceable rights issue together with free detachable warrants to follow suit upon completion of the proposed bonus issue to raise estimated gross proceeds of approximately RM1.1 billion to RM1.22 billion.
The warrants will be attached to the rights issue shares at no additional cost and will be issued to entitled shareholders that have subscribed for the rights issue shares. The two proposals are expected to be completed in the second quarter of 2022.
“This rights issue will improve the net gearing and financial position of the group. Up to 42.1% of the proceeds have been earmarked for Yinson’s new US$5.2 billion (RM21.97 billion) floating, production, storage and offloading (FPSO) project by Petróleo Brasileiro S.A. which will be operating in the North Campos Basin, offshore Brazil.
“In addition, up to 49.1% will be for repayment of bank borrowings, while the balance of the gross proceeds will be earmarked for expansion of Yinson’s renewables and green technology businesses, working capital, and expenses related to the implementation of the proposed bonus issue and rights issue,“ it said in a filing to Bursa.
Yinson group CEO Lim Chern Yuan said the group’s last rights issue was in 2014, after which Yinson had completed four FPSO projects.
“This time, part of the proceeds will be utilised to pay off bank borrowings, which will result in an annual interest savings of up to approximately RM22.5 million, while providing additional capital to accelerate the growth of our renewables and green technologies businesses,“ he said.
