KUALA LUMPUR: Yinson Holdings Bhd's (YHB) rights issue exercise, along with free detachable warrants undertaken by the company, was oversubscribed by 22.31 per cent.
Group chief executive officer Lim Chern Yuan said that from the pre-pandemic years until the recent return to normalcy, global demand for reliable energy sources such as oil, gas, and renewables had steadily risen.
He said this had driven the growth of the floating production, storage, and offloading (FPSO) market, especially in Brazil, along with the global development of green energy and its related technologies.
"Undertaking our second rights issue will enable us to continue delivering our targets for our offshore production business while realising the full potential of our renewables and green technologies businesses," he said in a statement today.
The exercise comprises 844.2 million rights shares based on two rights shares for every five existing shares, with 361.8 million free detachable warrants based on three warrants for every seven rights shares subscribed.
The valid acceptance and excess applications totalled 1.03 billion rights shares compared to the 844.2 million made available for subscription.
The rights shares are scheduled to be listed on the main market of Bursa Malaysia on 28 June 2022.
Proceeds from the exercise will fuel the company's growth and expansion plans while improving the net gearing and financial position.
Group chief strategy officer Daniel Bong said this latest rights issue is one of the largest equity fundraisings in the market since the Covid-19 pandemic.
"The oversubscription rate demonstrates our shareholders' enormous vote of confidence, which we take pride in.
"This has enabled us to raise RM1.19 billion, which is approximately 2.1x larger than our previous rights issue in 2014," he said.
The successful implementation of YHB's previous rights issue in 2014 led to the deployment of four FPSOs.
In December 2021, YHB announced its intention to undertake a 1-for-1 bonus issue followed by a rights issue with free detachable warrants.
These proposals were subsequently approved at an extraordinary general meeting held on 29 March 2022.
Of the RM1.19 billion gross proceeds raised, up to 64.0 per cent of the proceeds will be utilised for the FPSO Maria Quitéria project, awarded by Petróleo Brasileiro S.A. in Brazil.
As for the rest of the proceeds, it is estimated that 3.7 per cent will be for the expansion of the company's renewable energy and green technology businesses, 26.7 per cent for repayment of bank borrowings, 4.6 per cent for working capital, and 1.0 per cent for expenses related to this corporate exercise.