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Wednesday, September 3, 2014

Sumatec ... Rights Issue Coming !

Its major shareholder Tan Sri Halim Saad says he will increase his stake in Sumatec to 32% from 22.06% currently as he is in the company for the long term.

This will be done through the subscription of new shares arising from Sumatec’s acquisition of the Buzachi Neft oil field that is estimated to cost the company US$350mil (RM1.12bil).

In the proposed acquisition, Sumatec would undertake a rights issue which Halim would subscribe for his portion. Halim will accrue the additional shares by purchasing a block that will be put up for sale by a vendor of the Buzachi asset.

Halim, who has about 22% stake in Sumatec, estimated that it would cost him some RM550mil to increase his interest in the company.

Sumatec was looking to acquire the Buzachi Neft oil field from Borneo Energy Oil and Gas Ltd that has a proven and probable oil reserves of 68.86 million barrels.

The US$350mil consideration will be paid via US$225mil (RM720mil) cash and US$125mil (RM400mil) worth of Sumatec shares.

To fund this, Sumatec announced a proposed renounceable rights issue of up to 2.3 billion new Sumatec shares together with up to 2.3 billion free warrants at an indicative issue price of 40 sen per rights share. Sumatec shareholders with two shares will be entitled to subscribe for one rights and the warrant is thrown in free.

In the deal, a vendor of the Buzachi Neft oil field – Abu Talib Abdul Rahman – is offering for sale up to 727.27 million Sumatec shares, which Halim has agreed to take up.

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