KUALA LUMPUR: Oil and gas firm Sapura Energy Bhd has received full support from Permodalan Nasional Bhd (PNB) for its RM4 billion rights issue as part of an overall strategic plan to strengthen the group’s core businesses, boost its financial position and create better value for shareholders.
The company will raise RM3 billion through the rights issue of ordinary shares with free warrants and up to RM1 billion through the rights issue of Islamic redeemable convertible preference shares.
The exercise comes in view of Sapura Energy’s continued success in its growth strategy and the emerging opportunities ahead.
“Sapura Energy is in a strong growth phase and we are determined to capitalise on emerging opportunities… and continue with our growth momentum which includes bidding for and executing higher value projects globally,” said its president and CEO Shahril Shamsuddin.
Sapura Energy’s market is focused on the Middle East, Africa, Latin America, Caspian and Mediterranean as well as Southeast Asia and Australia.
To date, the group has secured contracts worth RM4.5 billion. Its order book has increased to RM16.7 billion with contract wins across Mexico, Brazil, India, Australia and Malaysia since the start of the financial year.
PNB has pledged to fully subscribe to its entitlement and mop up all available excess shares. PNB and its funds collectively hold about 12% in Sapura Energy.
Some observers consider PNB’s backing as an indication of strong government support for Sapura Energy as its new chairman, Zeti Akhtar Aziz, is a member of the Council of Eminent Persons which was tasked by the government to help reform the country’s economy and institutions.
This is against the notion that Sapura Energy had lost government support after the Employees Provident Fund (EPF) reduced its stake from 11% to 5%.
Other market observers say PNB is being opportunistic in seizing the chance to up its stakes in a strategic industry that promises big returns in the near future.
“EPF’s loss is PNB’s gain as this gives an opportunity for shareholders to participate in the company’s equity potential at an attractive entry price,” one observer said.
The Sapura Group has grown and established themselves as world-class players in their respective segments.
“Our businesses have grown to such a scale that it is now an opportune time to allow each of the businesses to have direct access to the capital markets to pursue their growth aspirations and ride on the growth wave,” Shahril said.