KUALA LUMPUR: Sapura Energy Bhd has received shareholders’ approval for its proposed rights issue to raise RM4 billion to trim its debts.
Shareholders voted overwhelmingly to subscribe to the group’s rights issue and support its growth plans at the extraordinary general meeting (EGM) today.
Permodalan Nasional Berhad (PNB) reconfirmed its support to subscribe in full to its rights shares with free warrants entitlement as well as excess rights shares, which may result in it having a 40% shareholding of the group’s enlarged share capital post-rights issue.
Shareholders passed all six resolutions in conjunction with the proposed rights issue, which entails raising up to RM4 billion, according to a statement from Sapura Energy.
Its president and Group CEO Shahril Shamsuddin said: “We are humbled by the support from our shareholders. The positive results indicate that shareholders are now fully conversant with the group’s growth prospects, which will bring greater returns and benefits in time.”
Sapura Energy is also making progress with its proposed strategic partnership with Austria-based OMV.
The statement said proceeds from both the rights issue and the proposed strategic partnership with OMV would be utilised to repay the group’s borrowings and for working capital.
Upon completion of both exercises, borrowings were expected to be reduced from RM16.4 billion as at 31 Jan 2018 to RM9.8 billion, thus lowering gearing ratio significantly from 1.74x to 0.62x, it said.
Subsequently, the group is expected to benefit from savings in finance cost of approximately RM320 million.
The stronger balance sheet is expected to provide greater financial flexibility for the group to deliver its business plans.
According to the statement, shareholders also voted overwhelmingly for the resolution that called for an exemption for PNB to make a mandatory takeover offer in view of its enlarged shareholding.
In addition, shareholders supported the proposed executive share option scheme.
Recently, Sapura Energy strengthened its presence in Mexico and Malaysia with new contract wins, valued at approximately RM1.75 billion, from Hokchi Energy, ENI Mexico and for Pan Malaysia Underwater Services.
Also, the group became one of the latest entrants into Saudi Aramco’s Long-Term Agreement (LTA) programme, one of the most sought-after in the industry.
As an LTA contractor, Sapura Energy can participate in bids for engineering, procurement, fabrication, transportation and installation contracts by Saudi Aramco.