Hibiscus petroleum to raise up to RM210m to fund future acquisitions
KUALA LUMPUR, Aug 2 — Hibiscus Petroleum Bhd has proposed to issue Convertible Redeemable Preference Shares (CRPS) to raise up to RM210 million to fund future acquisitions of oil and gas assets.
It expects to acquire assets that are in the development and/or production stage of their lifecycle and meet pre-defined financial investment criteria.
In a statement, Hibiscus Petroleum said it signed separate conditional subscription agreements with four parties, including existing shareholders, Sri Inderajaya Holdings Sdn Bhd and Lionel Lee Chye Tek, for the subscription of CRPS amounting to a total of RM52.5 million.
The agreements are conditional upon Hibiscus Petroleum obtaining all the necessary approvals.
The four investors have the option (exercisable during the relevant conversion period) to convert the CRPS at conversion prices that range between
RM1.81 and RM1.85 which represent premiums of between 7.5 per cent and 10 per cent over the 5-day volume weighted average market price (VWAMP) of Hibiscus Petroleum shares immediately before the date of the conditional subscription agreements.
The percentage premium to the conversion prices accorded to the respective investors is based on the quantum of CRPS subscribed, it said.
The balance of up to RM157.5 million in CRPS will be issued in multiple tranches to private investors, who will be identified over the next few months.
Hibiscus Petroleum’s Managing Director, Dr Kenneth Pereira said the Hibiscus Petroleum CRPS instrument is to be issued at a premium as Hibiscus Petroleum had incorporated various safeguards and features (including redemption provisions and a conversion option) to make it attractive to investors.
He said the safeguards assure investors that funds will be placed with an independent custodian and will only be disbursed by the independent custodian to the company after verification by an external expert that the minimum project investment criteria have been met or when the CRPS have been converted.
Another key feature of the CRPS is that if more than 20 per cent of the proceeds raised from issuance of all tranches of CRPS remain unutilised on the seventeenth month from the date of issue of the first CRPS tranche, investors have a one-time option to redeem the balance CRPS they hold based on a formula which incorporates a five per cent premium per annum.
However, if the balance proceeds are less than or equal to 20 per cent of the proceeds raised, the redemption option shall not be applicable, and the conversion of the remaining CRPS into Hibiscus Petroleum shares becomes mandatory at maturity date on the eighteenth month.
The CRPS are not tradable but it allows the investors to convert their CRPS into Hibiscus Petroleum shares upon the share price reaching RM3 per share or six months after the first tranche of CRPS has been issued, whichever is earlier. — Bernama