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Rights issue undersubscribed due to unfavourable sentiment, says Sapura Energy

TheEdge Mon, Jan 28, 2019 - 4 months ago


SERI KEMBANGAN (Jan 28): Oil and gas (O&G) services provider Sapura Energy Bhd said the under-subscription of its rights issue exercise was due to the cloudy conditions in the market at the time, which had affected investors' sentiment.

Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin said various factors, including the concerns on global trade, had caused some uncertainty over the recovery of the O&G industry.

"I think the sentiments during the rights issue was a bit muddled because there were so many conflicts. There was conflict between US and China and globally on trade that caused a lot of foreign investors to be a bit shy and local investors too.

"Institutions held back because they were uncertain of the industry's recovery. Unless you are in the business, you cannot see the pick-up in activity in the sector," he said.

However, Shahril pointed to the emergence of Permodalan Nasional Bhd as the largest shareholder of Sapura Energy, which he said is a testament to the group's potential for growth going forward.

Despite the under-subscription of the rights issue amid the uncertain market, he said the group still managed to secure the money which will go towards paring down its debt level.

Shahril spoke to the media today following an extraordinary general meeting (EGM) seeking Sapura Energy shareholders' approval for the group's joint venture with OMV Aktiengesellschaft.

Its shareholders approved the resolution, which will see OMV purchasing a 50% stake in Sapura Upstream Sdn Bhd for total proceeds of US$975 million (RM4 billion).

At the midday break today, Sapura Energy rose 3.57% or 1 sen to 29 sen with 204.62 million shares traded.








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