CEO: Injunction delays Petra’s bid to ease tight cashflow

  • Business
  • Wednesday, 27 Jan 2010

KUALA LUMPUR: Petra Perdana Bhd’s efforts to secure RM116mil to help ease its tight cash situation was delayed following the court injunction to stop it from selling its remaining 29.59% stake in associate firm, Petra Energy Bhd (PEB).

The amount is inclusive of the proceeds from its 5.38% divestment and repayment by PEB.

Petra Perdana chief executive officer Tengku Datuk Ibrahim Petra Tengku Indra Petra said the company would on Friday seek to strike out the injunction, which could help the company proceed with the sale by convening an EGM to seek shareholders’ approval.

The injunction was filed by suspended executive director Shamsul Saad who, along with 10 other shareholders, requested for an EGM on Feb 4 to remove Tengku Ibrahim, executive director Datin Nariza Hajjar Hashim, as well as independent non-executive directors, Wong Fook Heng and Tiong Young Kong, from the board.

Tengku Ibrahim said the reason they opted to divest the PEB shares in the first place was to address the tight cashflow and to prepare for challenging times ahead, as agreed to by the board.

“The Koh brothers and Shamsul made it clear that they are not against the Petra Energy stake sale, but the manner (in which) it was sold. The only thing they kept harping on was that we didn’t do it on an open tender and en bloc basis,” he said.

Tengku Ibrahim said selling en bloc would have triggered a mandatory general offer for the entire remaining shares in PEB, which would not augur well for the firm as it was currently a licence holder with Petronas.

He said although Petra Perdana was advised by an investment bank not to go for open tender and instead sell the shares in partial blocks, “we nevertheless advised the placement agent to sell the entire 54.62% block of shares. This was done through tender by invitation.”

Tengku Ibrahim also said if the 54.62% stake in PEB had been sold at the board’s approved rate of RM1.80 net per share, Petra Perdana would have been able to generate RM191mil.

From that, he reasoned that they would have been able to reduce bank borrowings of RM150mil, leaving excess cash of RM41mil.

The RM116mil cash reserve, to be made up from the extra RM41mil coupled with the RM62mil loan to be repaid by PEB and the RM13mil sales from the 5.38% stake previously, could have been used to address the tight cashflow for the 12 months ahead.

“The cashflow was very, very tight and it is even tighter now. This is because the money from the Petra Energy stake sale of 25.03%, plus the 5.38% stake sold earlier, has been placed in an escrow account.

“We can only receive the excess cash when the RM150mil is fully settled. The financial institution is holding it as collateral. Now we have to raise funds through other means which could prove to be more expensive, and could also delay matters,” he said. — Bernama

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