Yinson bags Atlanta FPSO project, proposes 1-for-1 bonus issue

KALA LUMPUR: Yinson Holdings Bhd's indirect wholly owned subsidiary, Yinson Acacia Ltd, has received a letter of intent (LOI) by Enauta Energia S.A. for the provision, operation and maintenance of a floating, production, storage and offloading (FPSO) asset in the Atlanta field in Santos Basin, offshore Brazil.

In a statement today, Yinson said the estimated aggregate value of the project is US$505 million (US$1=RM4.23) (including a two-year operations and maintenance agreement), with a further increase to US$1.98 billion (inclusive of a five-year extension period), should Yinson exercise the call option.

"The LOI comes with a call option exercisable by Yinson to acquire the asset-owning company of the project with a 15-year time-charter agreement and operation and maintenance agreement of the same duration, with Enauta having a right to extend the terms of these agreements by a further five years.

"The LOI also follows the signing of a binding Memorandum of Understanding (MoU) between Yinson and Enauta on Aug 27, 2021 to engage in exclusive negotiations for the potential supply and charter of the FPSO," it said.

The FPSO will be Yinson’s third project award in Brazil, with the earlier two on track for completion in 2023 and 2024, respectively.

In a separate statement, the company said it had proposed a one-for-one bonus issue which will see an issuance of up to 1.11 billion bonus shares, and the entitlement date will be announced later upon receiving all the relevant approvals.

Yinson has also proposed a renounceable rights issue together with free detachable warrants upon completion of the proposed bonus issue to raise estimated gross proceeds of about RM1.10 billion to RM1.22 billion.

The two proposals are expected to be completed in the second quarter (Q2) of 2022, it said.

According to the company, up to about 42.1 per cent of the proceeds have been earmarked for Yinson’s new US$5.2 billion FPSO project by Petróleo Brasileiro S.A. which will be operating in the North Campos Basin, offshore Brazil.

"In addition, up to approximately 49.1 per cent will be for repayment of bank borrowings, while the balance of the gross proceeds will be earmarked for expansion of Yinson’s renewables and green technology businesses, working capital, and expenses related to the implementation of the proposed bonus issue and rights issue," it said.

Commenting on the proposals, group chief executive officer Lim Chern Yuan said the company's last rights issue was in 2014, after which Yinson has successfully completed four FPSO projects.

"This time, part of the proceeds will be utilised to pay off bank borrowings, which will result in an annual interest savings of up to approximately RM22.5 million, whilst providing additional capital to accelerate the growth of our renewables and green technologies businesses," he said. - Bernama: