KUALA LUMPUR: Hibiscus Petroleum Bhd is planning to raise as much as RM2bil under a proposed private placement of convertible redeemable preference shares (CRPS), as the exploration and production company sees buying opportunities in a weak oil market.
The amount to be raised is more than double Hibiscus's current market value and nearly three times the aggregate amount raised by the company since its inception.
Hibiscus, in a statement today, said proceeds from the proposed exercise will be utilise to purchase good-value, high quality oil and gas assets.
"We are excited by the opportunities that we see on the horizon and we are determined to be prepared to address them from an equity and debt perspective," its managing director Kenneth Pereira said.
Hibiscus, which has oil production businesses in Sabah and the UK, is accelerating its asset acquisition plans as major exploration and production companies assess their portfolio amid the weaker industry outlook.
"The Group will prioritise assets with strong production potential coupled with cost optimisation opportunities and remains committed to growing its business in its areas of geographic focus, particularly South East Asia," it said.
The proposed placement of up to 2 billion CRPS may be implemented in single or multiple tranches.
The conversion price for the first tranche of the CRPS has been fixed at 66 sen, representing a premium of approximately 10% over the 5-day volume weighted average market price of Hibiscus Petroleum share price up to Sept 8.
CIMB Investment Bank Bhd and Hong Leong Investment Bank Bhd have been are the Joint Principal Advisers.
Affin Hwang Investment Bank Bhd, CIMB and HLIB have been appointed to act as the Joint Bookrunners to procure prospective placees for the CRPS.
The proposed placement of CRPS is subject to various regulatory and shareholders’ approvals being obtained.
Hibiscus will be calling for an EGM for this purpose.
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