KUCHING: Perdana Petroleum Bhd (PPB) has received approval from Bursa Securities on the company’s proposed renounceable rights issue of redeemable convertible preference shares (RCPS). From the rights issue of the RCPS, Perdana Petroleum intends to raise a minimium gross proceeds of RM455 million and maximium of RM506 million.
Perdana Petroleum’s holding company and major shareholder Dayang Enterprise Holdings Bhd (Dayang) will undertake to subscribe for the RCPS up to RM455 million. Dayang, which has about a 60.48 percent stake in Perdana Petroleum, provides, through its subsidiaries, offshore topside maintenance services, minor fabrication works, offshore hook-up and commissioning services for the oil & gas companies as well as chartering of marine vessels.
Perdana Petroleum group,on the other hand,is principally involved in the provision of marine support services which include the supply of vessels for the upstream oil & gas industry. Most of its vessels are leased to the Dayang group. Should all the entitled shareholders subscribe in full for their respective entitlements under the fund raising exercise, Perdana Petroleum may potentially raise up to RM506 million.
In a filing with Bursa Malaysia,Perdana Petroleum said Bursa Securities had approval the admission to its official list of 1,946,177,372 RCPS arising the proposed rights issue.
Also approved is the listing of up to the same number of new Perdana Petroleum shares persuant to the conversion of the RCPS.
The approval is granted on conditions,among others,that Perdana Petroleum has to furnish Bursa Securities on a quarterly basis a summary of the total number of shares listed pursuant to the conversion of the RCPS as at the end of each quarter together with a detailed computation of listing fee payable.
According to Perdana Petroleum, the rights issue of RCPS will allow the company to repay part of Dayang’s advances in an expeditious manner through a set-off arrangement whereby Dayang’s advances will be directly set off against the subscription monies due from Dayang.
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.
Perdana Petroleum has proposed to provide financial assistance to Dayang in the form of corporate guarantees,indemnities and/or collaterals for banking facilities obtained or to be obtained by Dayang from licensed financial institutions up to an aggregate sum of RM682.5 million.
Perdana Petroleum’s massive debts is currently being restructured with the help of the Corporate Debt Restructuring Committee (CDRC) of Bank Negara.
The admission by Perdana Petroleum into the CDRC is consistent with the company’s strategy to streamline its operations and optimise its financial resources and formed part of the group-wide debt restructuring exercise currently undertaken by Dayang and its subsidiaries, including Perdana Petroleum.
Besides its undertaking to subscribe Perdana Petroleum’s RCPS issuance, Dayang plans to undertake a proposed issuance of an un-rated Islamic medium term notes of up to RM682.5 million in nominal value based on the Shariah principle of Murabahah under a sukuk murabahah programme (sukuk programme) to be established as part of Dayang’s group-wide debt restructuring exercise to restructure and reschedule Dayang group’s existing borrowings.
The proceeds to be raised from the sukuk programme will be utilised for partial repayment of the Dayang group’s existing borrowings and the remaining balance will be channelled to Perdana Petroleum for the early redemption of the latter’s sukuk murabahah.
The Perdana Petroleum’s sukuk programme, which was guaranteed by Dayang,was issued on April 28, 2016 for a nominal value of RM635 million. Perdana Petroleum is required to repay the amount in five tranches .
The first three tranches of RM90 million each had been repaid. Dayang had in April 2019 obtained a short term loan facility of RM90 million from a licensed financial institution to bride the third tranche repayment by Perdana Petroleum. The fourth tranche of RM90 million is due to mature on April 28,2020 and the fifth tranche of RM275 million will mature on April 28, 2021.