Malaysia’s Sapura Plans to Raise $1bn

Malaysia’s Sapura Energy said August 24 it will be raising ringgit 4bn ($970mn) via a rights issue to strengthen its core businesses and boost its financial position.

Of the ringgit 4bn it plans to raise, 75% will be through the rights issue of ordinary shares with free warrants and up to 25% through the rights issue of Islamic redeemable convertible preference shares.

Sapura said it is also looking at listing of its exploration and production (E&P) business and exploring a possible strategic partnership for its drilling business. “Sapura Energy is in a strong growth phase today and we are determined to capitalise on the emerging opportunities. The rights issue will enable us to strengthen our balance sheet and continue with our growth momentum which includes bidding for and executing higher value projects globally,” CEO Tan Sri Dato’ Seri Shahril Shamsuddin said.

The company is venturing into markets such as Middle East, Africa, Latin America, Caspian and Mediterranean as well as South East Asia and Australia and to date has secured contract wins of ringgit 4.5bn. Its order book has increased to ringgit 16.7bn ($4bn) with contract wins across Mexico, Brazil, India, Australia and Malaysia, since the start of the financial year.

Sapura has secured letters of support from major shareholders like Sapura Technology and Permodalan Nasional Berhad (PNB). Sapura Technology, a direct shareholder which holds 16%, has expressed its intent to participate in the rights issue for a minimum amount of ringgit 300mn, the company said. Meanwhile, PNB has indicated its support for the exercise by committing to subscribe to its entitlement and is looking at the prospect of taking up excess shares up to an agreed amount to be determined later.

Sapura Energy is an integrated oil and gas services and solutions provider operating across the entire upstream value chain, including decommissioning.