Perdana Petroleum proposes rights issue up to RM506m
Published on: Wednesday, May 22, 2019
KUCHING: Perdana Petroleum Bhd has proposed to undertake a rights issue of redeemable convertible preference shares (RCPS) that could raise up to RM506mil.
Perdana’s single largest shareholder, Dayang Enterprise Holdings Bhd, has provided a written unconditional and irrevocable undertaking to Perdana to subscribe up to RM455mil of the RCPS.
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The issue size of the Perdana RCPS, with a tenure of 10 years, is up to RM506mil in value. One RCPS is convertible into one Perdana share. The illustrative issue price of the RCPS is 26 sen.
Dayang owns some 470.79 million shares or a 60.48pc stake in Perdana.
Perdana is principally involved in the supply of offshore marine support services for the upstream oil and gas (O&G) industry in the domestic and regional markets.
The group owns a fleet of 16 vessels, including accommodate work barges, anchor handling tug supply vessels and work boats.
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“The proposed rights issue of RCPS is part of a wider and comprehensive debt-restructuring exercise the company is now undertaking under the auspices of the Corporate Debt Restructuring Committee of Bank Negara, with the participating financial institutions and other lenders, including Dayang (the lenders).
“It is the intention of the company to reach a debt settlement with the lenders, which will leave the company on a firmer financial footing, enabling it to operate sustainably going forward.
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“As such, the proposed rights issue of RCPS is a major component and critical to the overall success of the company’s comprehensive debt-restructuring exercise,” Perdana said in a filing with Bursa Malaysia.
With the undertaking from Dayang, the rights issue of RCPS will raise a minimum of RM455mil.
This, according to Perdana, would enable the company to repay part of Dayang’s advances of RM645.66mil in an expeditious manner through the set-off arrangement, whereby Dayang’s advances would be directly set off against the subscription monies.
“The repayment via the set-off arrangement will reduce the liabilities of the group without any cash outflow, which is expected to improve the financial position of the group and place it on a stronger financial footing.
“Following the set-off arrangement, the total amount owing by Perdana to Dayang would reduce to RM190mil,” added Perdana.
If the minimum RM455mil is raised, Perdana intends to utilise RM49.7mil in gross proceeds as working capital.
Meanwhile, Dayang has proposed to undertake a renounceable rights issue and private placement that could raise up to about RM187mil.
The company has also proposed to subscribe to Perdana’s RCPS of up to RM455mil, reports the Star.
The proposed rights issue, private placement and subscription of Perdana’s RCPS are undertaken in conjunction with the restructuring of Dayang and its subsidiaries’ debt, which includes the proposed establishment of a sukuk programme by Dayang and the proposed issuance of sukuk under the sukuk programme for a nominal amount of up to RM682.5mil.
Under the proposals, Dayang will issue up to about 96.48 million new ordinary shares on the basis of one rights share for every 10 shares held at an entitlement date to be determined later.
For illustrative purposes, the rights issue price is assumed at 80 sen per share and placement shares at RM1.14 apiece.
Dayang’s major shareholders, who collectively hold some 51.59pc of equity interest in the company, have undertaken to subscribe their respective entitlements in full under the proposed rights issue.
Dayang intends to procure underwriting arrangement(s) for the remaining 47.7 million rights shares.
The proposed rights issue and private placement are expected to raise up to RM77.18mil and RM109.99mil, respectively.
Dayang has also proposed to place out about 94.48 million new shares, representing about 10pc of the company’s total number of issued shares.
According to Dayang, RM70mil from the gross proceeds of the rights issue would be used for the partial repayment of bank borrowings and RM4.69mil for working capital.
As at Dec 31, 2018, Dayang’s net borrowing stood at RM867.4mil with a gearing ratio of 0.77 times.
The proceeds from the private placement will be used for the build-up of the sinking fund for the proposed sukuk progamme (RM75mil), capital expenditure (RM15mil), working capital (RM17.5mil) and estimated expenses for the fund-raising exercise (RM2.5mil).
The sinking fund will be used to repay part of the principal amount and interest falling due during the first three years of the sukuk tenure.
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