BornOil set to expand gold mining activities

Labuan: RHB Investment Bank Berhad, on behalf of Borneo Oil Berhad (BornOil), has announced that BornOil's rights issue with free Warrants has been approved by Bursa Malaysia.This development opens up the path for BornOil to expand on its lucrative gold mining activities in Peninsular Malaysia, which the company believes would potentially exceed 25 per cent or more of the BornOil Group's net profit in the near future.

BornOil's renounceable rights issue entails up to 2,373,841,596 rights shares at an indicative issue price of RM0.10 per rights share on the basis of six (6) rights shares for every one (1) existing BornOil share held, together with up to 1,186,920,798 free detachable Warrants C on the basis of one (1) free warrant C for every two (2) rights shares subscribed.

The free Warrants C attached to the Rights Shares, in turn, will be issued at no cost to entitled shareholders and/ or their renouncee(s) who subscribe for the Rights Shares.

Victoria Limited and Hap Seng Insurance Services Sdn Bhd – substantial shareholders of BornOil – have pledged to subscribe in full for their respective entitlements, while the public portion of the Right Issue will be underwritten by RHB.

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Meanwhile, BornOil's Fast Food Chain, Sugarbun continues to expand rapidly, both domestically and internationally. Currently there are 76 franchised outlets in Malaysia and abroad and a total of 14 more new franchised outlets will be added this year – thereby further contributing to BornOil's bottom line and already strong cash flow.

Together with the continuing improved performance of the Fast-Food division and others, the Group's operations is expected to grow from strength-to-strength.

As announced by the company previously, BornOil has been awarded an additional five new mining sites by HDL Global Sdn Bhd. This exercise is expected to raise RM223.39 million for the Company, which intends to use the bulk of proceeds to expand and accelerate its gold mining activities and operations – further enhancing the Company's earnings in future years.

"In the longer term, BornOil will emerge as a major player in the gold mining industry domestically and regionally, with the ultimate objective of constantly expanding and strengthening its business base in order to always maximise returns for loyal shareholders," said BornOil executive director Raymond Teo.

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"With the addition of the gold mining business starting to come to fruition, these positive developments augur well for the financial performance of BornOil in both the foreseeable and long term future," he added.

"Due to depressed gold prices prevailing in the market currently, this means that we are entering the industry at a most opportune of timing with low entry costs which augurs well for long term sustainability and profitability," Teo further said.

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