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Transcript of SAPURA ENERGY BERHADir.chartnexus.com/sapuraenergy/website_HTML/attachments/attach… · (iii)...
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A
(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;
(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;
(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);
(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);
(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND
(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B
INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION
AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Principal Adviser Independent Adviser
Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)
The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:
Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik
The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.
This Circular is dated 7 November 2018
i
ii
iii
DEFINITIONS (Cont’d)
iv
Implied Conversion Price : The implied conversion price for the RCPS-i of RM0.41 for every new SEB Share based on the Conversion Ratio, subject to adjustments to be determined by our Board in the event of any alteration to the share capital of our Company
Listing Requirements : Main Market Listing Requirements of Bursa Securities
LPD : 31 October 2018, being the latest practicable date prior to the printing of this Circular
LTIP : Our Company’s existing long-term incentive plan via a share issuance scheme which commenced on 1 December 2014 and will expire on 30 November 2021
Mandatory Offer : The obligation of the PNB Group to undertake a mandatory take-over offer to acquire:
(i) all the remaining SEB Shares, Warrants and RCPS-i not already owned by them after the Proposed Rights Issue of Shares with Warrants; and/or
(ii) all the remaining SEB Shares following the exercise of the Warrants during the Exercise Period and/or the conversion of the RCPS-i at the RCPS-i Maturity Date
Market Day : A day on which the stock market of Bursa Securities is open for trading in securities
Maximum Shares : Ten percent (10%) of the total number of issued SEB Shares(excluding treasury shares, if any)
Maybank IB or Principal Adviser
: Maybank Investment Bank Berhad
Maybank Islamic : Maybank Islamic Berhad, being the Shariah Adviser for the Proposed Rights Issue of RCPS-i
Mercury Securities : Mercury Securities Sdn Bhd, being the Independent Adviser for the Proposed Exemption
MFRS 2 : Malaysian Financial Reporting Standard 2 on Share-based Payment
NA : Net assets
Offer : An offer made in writing by the ESOS Committee to an Eligible Person in accordance with the By-Laws
OPEC : Organisation of the Petroleum Exporting Countries
Options Exercise Price : The price at which a Grantee shall be entitled to subscribe for new SEB Shares pursuant to the exercise of an Option
Participating Group : Our Group excluding dormant subsidiaries
PNB : Permodalan Nasional Berhad
PNB Funds : Collectively, the Funds and Bumiputera Wealth Fund, ASN Equity 5 and ASN Sara (Mixed Asset Conservative) 2
iv
(b)
v
DEFINITIONS (Cont’d)
vi
Proposed Rights Issue of Shares with Warrants
: Proposed renounceable rights issue of up to 9,986,925,145 Rights Shares at the Rights Issue Price together with up to 998,692,515 Warrants on the basis of five (5) Rights Shares for every three (3) SEB Shares held on the Entitlement Date and one (1) Warrant for every ten (10) Rights Shares subscribed
RCPS-i : New Islamic redeemable convertible preference shares in our Company to be issued pursuant to the Proposed Rights Issue of RCPS-i
RCPS-i Issue Date : The date of issuance of the RCPS-i
RCPS-i Issue Price : The issue price of RM0.41 per RCPS-i
RCPS-i Maturity Date : The day immediately preceding the fifth (5th) anniversary from the RCPS-i Issue Date
Record of Depositors : A record provided by Bursa Depository pursuant to Chapter 24 of the Rules of Bursa Depository
Rights Issue Price : The issue price of RM0.30 per Rights Share
Rights Shares : New SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants
Rules : Rules on Take-Overs, Mergers and Compulsory Acquisitions
SC : Securities Commission Malaysia
SEB or Company : Sapura Energy Berhad
SEB Group or Group : Collectively, SEB and its subsidiaries
SEB Shares or Shares : Ordinary shares in SEB
SEP Malaysia : Sapura Exploration and Production (Malaysia) Inc
Shariah Pronouncement Letter
: Pronouncement letter issued by the Maybank Islamic in relation to the RCPS-i
STSB : Sapura Technology Sdn Bhd
STSB Undertaking : The irrevocable undertaking from STSB to subscribe to a minimum of RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date
TERP : Theoretical ex-rights price
TSS : Tan Sri Dato’ Seri Shahril Shamsuddin
Undertakings : Collectively, PNB Undertaking, the Funds’ Undertaking and STSB Undertaking
Undertaking Letters : Letters dated 21 September 2018 and 24 September 2018 from the Undertaking Shareholders on their respective undertakings in relation to the Proposed Rights Issue
Undertaking Shareholders
: Collectively, PNB, the Funds and STSB
vi
DEFINITIONS (Cont’d)
vii
United States : United States of America
U.S. Securities Act : United States Securities Act of 1933
VWAMP : Volume weighted average market price
WAMP : Weighted average market price
Warrants : Free detachable warrants in SEB to be issued pursuant to the Proposed Rights Issue of Shares with Warrants
CURRENCIES
RM and sen : Ringgit Malaysia and sen
USD : United States Dollar
INR : Indian Rupee
All references to “our Company” or “SEB” in this Circular are to SEB and references to “our Group” or “SEB Group” are to our Company and our subsidiaries, collectively. All references to “we”, “us”, “our” and “ourselves” are to our Company, and where the context requires otherwise, shall include our Company and our subsidiaries.
All references to “you” or “your” in this Circular are to our shareholders.
Unless specifically referred to, words denoting the singular shall, where applicable, include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders, and vice versa. Reference to persons shall include corporations, unless otherwise specified.
Any reference to any act, written law, ordinance, enactment or guideline in this Circular is a reference to that act, written law, ordinance, enactment or guideline as amended or re-enacted from time to time.
Any discrepancy in the figures included in this Circular between the amounts stated and the totals thereof are due to rounding.
Any discrepancies in the tables included in this Circular between the amounts listed, actual figures and the totals thereof are due to rounding.
Any reference to a time of day in this Circular is a reference to Malaysian time, unless otherwise stated.
This Circular includes forward-looking statements. All statements other than statements of historical facts included in this Circular including, without limitation, those regarding our Group’s financial position, business strategies, prospects, plans and objectives of our Company for future operations, are forward-looking statements. There can be no assurance that such forward-looking statements will materialise, be fulfilled or be achieved.
Unless otherwise stated, the exchange rate of USD1:RM4.1840, being the middle rate quoted by Bank Negara Malaysia at 5.00 p.m. as at the LPD has been applied throughout this Circular for illustration purposes.
Any exchange rate translations in this Circular are provided solely for your convenience and should not be constituted as representative that the translated amount stated in this Circular could have been or would have been converted into such other amounts or vice versa.
vii
CONTENTS
viii
PAGE
PART A LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSALS AND PROPOSED GRANT CONTAINING: 1. INTRODUCTION ...................................................................................................................... 1 2. DETAILS OF THE PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS .............. 3 3. DETAILS OF THE PROPOSED RIGHTS ISSUE OF RCPS-i ................................................. 8 4. DETAILS OF THE PROPOSED EXEMPTION ...................................................................... 11 5. DETAILS OF THE PROPOSED ESOS ................................................................................. 15 6. DETAILS OF THE PROPOSED AMENDMENTS .................................................................. 20 7. USE OF PROCEEDS ............................................................................................................. 20 8. RATIONALE AND BENEFITS OF THE PROPOSALS .......................................................... 22 9. FOREIGN ADDRESSED SHAREHOLDERS ........................................................................ 23 10. INDUSTRY OVERVIEW AND PROSPECTS ........................................................................ 25 11. EFFECTS OF THE PROPOSALS ......................................................................................... 28 12. APPROVALS REQUIRED ..................................................................................................... 37 13. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS
CONNECTED WITH THEM ................................................................................................... 40 14. DIRECTORS’ RECOMMENDATION ..................................................................................... 41 15. TENTATIVE TIMETABLE ...................................................................................................... 41 16. HISTORICAL SHARE PRICES .............................................................................................. 42 17. CORPORATE EXERCISE/SCHEME ANNOUNCED BUT PENDING COMPLETION .......... 42 18. EGM ....................................................................................................................................... 42 19. FURTHER INFORMATION .................................................................................................... 43 PART B IAL FROM MERCURY SECURITIES TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION ................................................................................ 44
viii
CONTENTS (Cont’d)
ix
PAGE APPENDICES I SALIENT TERMS OF THE WARRANTS 152 II SALIENT TERMS OF THE RCPS-i 154 III DRAFT BY-LAWS 160 IV SUMMARY INFORMATION ON THE LTIP 184 V AMENDMENTS TO OUR CONSTITUTION 185 VI SHARIAH PRONOUNCEMENT LETTER 202 VII FURTHER INFORMATION 219 NOTICE OF EGM ENCLOSED PROXY FORM ENCLOSED
ix
x
PART A
LETTER FROM OUR BOARD TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSALS AND PROPOSED GRANT
x
1
SAPURA ENERGY BERHAD (Company No. 950894-T)(Incorporated in Malaysia)
Registered Office Sapura@Mines
No. 7, Jalan Tasik The Mines Resort City
43300 Seri Kembangan Selangor Darul Ehsan
Malaysia
7 November 2018
Board of Directors Dato’ Hamzah Bakar (Chairman, Non-Independent Non-Executive Director) Tan Sri Dato’ Seri Shahril Shamsuddin (President and Group Chief Executive Officer, Non-Independent Executive Director) Tan Sri Datuk Amar (Dr) Hamid Bugo (Senior Independent Non-Executive Director) Dato’ Shahriman Shamsuddin (Non-Independent Non-Executive Director)Mohamed Rashdi Mohamed Ghazalli (Independent Non-Executive Director) Gee Siew Yoong (Independent Non-Executive Director) Datuk Ramlan Abdul Malek (Non-Independent Non-Executive Director) Datuk Muhamad Noor Hamid (Independent Non-Executive Director) Datuk Ramlan Abdul Rashid (Independent Non-Executive Director)
To: Our Shareholders
Dear Sir/Madam,
(I) PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS;(II) PROPOSED RIGHTS ISSUE OF RCPS-i;(III) PROPOSED EXEMPTION;(IV) PROPOSED ESOS;(V) PROPOSED GRANT; AND(VI) PROPOSED AMENDMENTS
1. INTRODUCTION
On 24 August 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the following:
(i) Proposed Rights Issue of Shares with Warrants;
(ii) Proposed Rights Issue of RCPS-i; and
(iii) Proposed Amendments.
1
SAPURA ENERGY BERHAD (Company No. 950894-T)(Incorporated in Malaysia)
Registered Office Sapura@Mines
No. 7, Jalan Tasik The Mines Resort City
43300 Seri Kembangan Selangor Darul Ehsan
Malaysia
7 November 2018
Board of Directors Dato’ Hamzah Bakar (Chairman, Non-Independent Non-Executive Director) Tan Sri Dato’ Seri Shahril Shamsuddin (President and Group Chief Executive Officer, Non-Independent Executive Director) Tan Sri Datuk Amar (Dr) Hamid Bugo (Senior Independent Non-Executive Director) Dato’ Shahriman Shamsuddin (Non-Independent Non-Executive Director)Mohamed Rashdi Mohamed Ghazalli (Independent Non-Executive Director) Gee Siew Yoong (Independent Non-Executive Director) Datuk Ramlan Abdul Malek (Non-Independent Non-Executive Director) Datuk Muhamad Noor Hamid (Independent Non-Executive Director) Datuk Ramlan Abdul Rashid (Independent Non-Executive Director)
To: Our Shareholders
Dear Sir/Madam,
(I) PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS;(II) PROPOSED RIGHTS ISSUE OF RCPS-i;(III) PROPOSED EXEMPTION;(IV) PROPOSED ESOS;(V) PROPOSED GRANT; AND(VI) PROPOSED AMENDMENTS
1. INTRODUCTION
On 24 August 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the following:
(i) Proposed Rights Issue of Shares with Warrants;
(ii) Proposed Rights Issue of RCPS-i; and
(iii) Proposed Amendments.
1
2
On 25 September 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the Proposed ESOS. It was also announced that in conjunction with the Proposed Rights Issue of Shares with Warrants and Proposed Rights Issue of RCPS-i, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
Mercury Securities has been appointed by our Company pursuant to the Rules to act as the Independent Adviser to the non-interested directors and non-interested shareholders of our Company on the Proposed Exemption.
On 16 October 2018, Maybank IB had, on behalf of our Board, announced that BNM had, vide its letter dated 15 October 2018, approved the issuance of the RCPS-i to the non-resident shareholders of our Company pursuant to the Proposed Rights Issue of RCPS-i subject to the conditions set out in Section 12 of Part A of this Circular.
On 5 November 2018, Maybank IB had, on behalf of our Board, announced that the Shariah Advisory Council of the SC had, vide its letter dated 2 November 2018, informed that it has no objection to the Proposed Rights Issue of RCPS-i.
On 5 November 2018, Maybank IB had, on behalf of our Board, announced that Bursa Securities had, vide its letter dated 5 November 2018, approved the following:
(i) admission of up to 998,692,515 Warrants and 2,396,862,035 RCPS-i to the Official List of Bursa Securities;
(ii) listing of the following on the Main Market of Bursa Securities:
(a) up to 9,986,925,145 Rights Shares;
(b) up to 998,692,515 Warrants;
(c) up to 998,692,515 Exercised Shares;
(d) up to 2,396,862,035 RCPS-i;
(e) up to 2,396,862,035 Conversion Shares; and
(f) such number of new SEB Shares to be issued pursuant to the Proposed ESOS,representing up to ten percent (10%) of the total issued SEB Shares (excluding treasury shares, if any) at any point in time,
subject to the conditions set out in Section 12 of Part A of this Circular.
THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE DETAILS OF THE PROPOSALS AND PROPOSED GRANT AND TO SEEK YOUR APPROVAL FOR THE RESOLUTIONS PERTAINING TO THE PROPOSALS AND PROPOSED GRANT TO BE TABLED AT THE FORTHCOMING EGM. THE NOTICE OF EGM TOGETHER WITH THE PROXY FORM ARE ENCLOSED IN THIS CIRCULAR.
YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR, INCLUDING THE IAL AS SET OUT IN PART B OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS AND PROPOSED GRANT TO BE TABLED AT THE FORTHCOMING EGM.
2
3
2. DETAILS OF THE PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS
2.1 Background information on the Proposed Rights Issue of Shares with Warrants
The Proposed Rights Issue of Shares with Warrants entails the issuance of up to 9,986,925,145 Rights Shares at the Rights Issue Price together with up to 998,692,515 Warrants to the Entitled Shareholders on the basis of five (5) Rights Shares for every three (3) SEB Shares held on the Entitlement Date and one (1) Warrant for every ten (10) Rights Shares subscribed by the Entitled Shareholders.
As at the LPD, our Company has not granted any SEB Shares pursuant to the LTIP. In any case, the actual number of Rights Shares to be issued will be determined based on the issued share capital of SEB as at the Entitlement Date and the actual number of Warrants to be issued will depend on the total number of Rights Shares subscribed by the Entitled Shareholders.
The Rights Shares with Warrants will be provisionally allotted to the Entitled Shareholders. In determining shareholders’ entitlements under the Proposed RightsIssue of Shares with Warrants, fractional entitlements, if any, will be disregarded and dealt with in such manner as our Board in its absolute discretion deems fit and expedient, and in the best interest of our Company. The Proposed Rights Issue of Shares with Warrants is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the Rights Shares together with the Warrants in full or in part. The renunciation of the Rights Shares by the Entitled Shareholders will entail the renunciation of the Warrants to be issued together with the Rights Shares. However, if the Entitled Shareholders decide to accept only part of the Rights Shares entitlements, they shall be entitled to the Warrants in proportion of their acceptance of their Rights Shares entitlements. For avoidance of doubt, the Rights Shares and the Warrants are not separately renounceable.
The Rights Shares which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of our Board to allocate the excess Rights Shares with Warrants, if any, in a fair and equitable manner on a basis to be determined by our Board.
The Warrants will be immediately detached from the Rights Shares upon issuance and will be traded separately. The salient terms of the Warrants are set out in Appendix Iof this Circular.
Notwithstanding anything to the contrary herein, the Rights Shares with Warrants will not be offered or sold to any shareholders or in any jurisdictions where such offer or sale would be unlawful. In particular, the Rights Shares with Warrants will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. For the avoidance of doubt, nothing in this Circular constitutes an offer of securities in the United States or in any other jurisdiction. This Circular is being made available to you for information purposes only to enable you to consider the Proposals and Proposed Grant at the forthcoming EGM.
2.2 Basis and justification for the Rights Issue Price and Exercise Price
2.2.1 Rights Issue Price
The Rights Issue Price was determined after taking into consideration the following:
(i) prevailing market price of the SEB Shares;
3
4
5
2.3 Ranking of the Rights Shares and Exercised Shares
The Rights Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Rights Shares. The Exercised Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Exercised Shares.
2.4 Listing of the Rights Shares, Warrants and Exercised Shares
Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the following:
(i) admission of up to 998,692,515 Warrants to the Official List of Bursa Securities; and
(ii) listing of up to 9,986,925,145 Rights Shares, 998,692,515 Warrants and 998,692,515 Exercised Shares on the Main Market of Bursa Securities,
subject to the conditions set out in Section 12 of Part A of this Circular.
2.5 Shareholders’ undertaking and underwriting arrangement
The Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis.
Our Company has procured the following undertakings in respect of the Proposed Rights Issue of Shares with Warrants:
(i) STSB Undertaking, pursuant to which STSB irrevocably undertakes that STSB will subscribe to a minimum of RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date; and
(ii) PNB Undertaking and the Funds’ Undertaking, pursuant to which PNB and ART, acting in its capacity as trustee of the Funds, irrevocably undertakes that:
(a) PNB and the Funds will subscribe in full for all the Rights Shares with Warrants that PNB and the Funds shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date; and
(b) PNB Group will, at an allocation to be determined later and subject to the availability of Excess Rights Shares, subscribe to such Excess Rights Shares, resulting in the PNB Group having shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue of Shares with Warrants.
5
6
7
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2,80
2,34
9 84
0,70
4.6
280,
235
28.0
6 4,
449,
219
1,33
4,76
5.8
444,
922
44.5
5
The
tota
l Rig
hts
Shar
es w
ith W
arra
nts
to b
e su
bscr
ibed
pur
suan
t to
the
Und
erta
king
s an
d th
e di
rect
sha
reho
ldin
g an
d to
tal W
arra
nts
held
by
the
Und
erta
king
Sh
areh
olde
rs a
fter t
he P
ropo
sed
Rig
hts
Issu
e of
Sha
res
with
War
rant
s ar
e as
follo
ws:
Afte
r the
Pro
pose
d R
ight
s Is
sue
of S
hare
s w
ith W
arra
nts
Tota
l Rig
hts
Shar
es w
ith W
arra
nts
to b
e su
bscr
ibed
pur
suan
t to
the
Und
erta
king
sD
irect
sha
reho
ldin
g To
tal W
arra
nts
held
No.
of S
EB
Shar
es
Am
ount
No.
of
War
rant
s(1
)%
No.
of S
EB
Shar
es
%N
o. o
f War
rant
s(2
)%
(‘000
)(R
M‘0
00)
(‘000
)(‘0
00)
(‘000
)S
TSB
1,00
0,00
030
0,00
0.0
100,
000
10.0
1 1,
953,
004
12.2
2 10
0,00
010
.01
PN
B G
roup
5,66
3,22
71,
698,
968.
2 56
6,32
356
.71
6,39
1,63
2 40
.00
566,
323
56.7
1 6,
663,
227
1,99
8,96
8.2
666,
323
66.7
2 8,
344,
636
52.2
2 66
6,32
366
.72
Not
es:
(1)
Com
pute
d ba
sed
on th
e R
ight
s S
hare
s su
bscr
ibed
div
ided
by
the
tota
l Rig
hts
Shar
es is
sued
pur
suan
t to
the
Pro
pose
d R
ight
s Is
sue
of S
hare
s w
ith W
arra
nts.
(2
) C
ompu
ted
base
d on
the
War
rant
s su
bscr
ibed
div
ided
by
the
tota
l War
rant
s is
sued
pur
suan
t to
the
Pro
pose
d R
ight
s Is
sue
of S
hare
s w
ith W
arra
nts.
The
Und
erta
king
Sha
reho
lder
s ha
ve a
lso
resp
ectiv
ely
conf
irmed
via
the
Und
erta
king
sLe
tters
that
the
y ha
ve s
uffic
ient
fin
anci
al r
esou
rces
to
fulfi
l th
eir
com
mitm
ent
unde
r th
e U
nder
taki
ng L
ette
rs.
May
bank
IB
has
verif
ied
that
the
Und
erta
king
Sha
reho
lder
s ha
ve s
uffic
ient
fin
anci
al r
esou
rces
to
fulfi
l th
eir
resp
ectiv
e co
mm
itmen
tpur
suan
t to
the
Und
erta
king
Lette
rs.
As th
e Pr
opos
ed R
ight
s Is
sue
of S
hare
s w
ith W
arra
nts
will
be
unde
rtake
n on
full
subs
crip
tion
basi
s, o
ur C
ompa
ny w
ill e
nter
into
und
erw
ritin
g ar
rang
emen
ts fo
r th
e po
rtion
of t
he R
ight
s S
hare
s fo
r w
hich
no
unde
rtaki
ng h
as b
een
prov
ided
. The
und
erw
ritin
g ar
rang
emen
ts a
re o
nly
expe
cted
to b
e in
pla
ce p
rior
to th
e im
plem
enta
tion
of th
e Pr
opos
ed R
ight
s Is
sue
of S
hare
s w
ith W
arra
nts,
det
ails
of w
hich
will
be a
nnou
nced
upo
n ex
ecut
ion
of th
e un
derw
ritin
g ag
reem
ent.
7
8
In the event that the direct shareholding of the PNB Group increases to above 33% of the enlarged issued share capital of our Company upon completion of the Proposed Rights Issue of Shares with Warrants as a consequence of the PNB Undertaking and the Funds’ Undertaking, the PNB Group will be obliged to undertake the Mandatory Offer. The PNB Group therefore intends to seek the Proposed Exemption, details of which are set out in Section 4 of Part A of this Circular.
3. DETAILS OF THE PROPOSED RIGHTS ISSUE OF RCPS-i
3.1 Background information on the Proposed Rights Issue of RCPS-i
The Proposed Rights Issue of RCPS-i entails the issuance of up to 2,396,862,035 RCPS-i to the Entitled Shareholders on the basis of two (2) RCPS-i for every five (5) SEB Shares held by the Entitled Shareholders on the Entitlement Date at the RCPS-iIssue Price.
The RCPS-i will be provisionally allotted to the Entitled Shareholders. In determining shareholders’ entitlements under the Proposed Rights Issue of RCPS-i, fractional entitlements, if any, will be disregarded and dealt with in such manner as our Board in its absolute discretion deems fit and expedient, and in the best interest of our Company. The Proposed Rights Issue of RCPS-i is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the RCPS-i in full or in part.
The RCPS-i which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of our Board to allocate the excess RCPS-i, if any, in a fair and equitable manner on a basis to be determined by our Board.
The salient terms of the RCPS-i are set out in Appendix II of this Circular.
Notwithstanding anything to the contrary herein, the RCPS-i will not be offered or sold to any shareholders or in any jurisdictions where such offer or sale would be unlawful. In particular, the RCPS-i will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. For the avoidance of doubt, nothing in this Circular constitutes an offer of securities in the United States or in any other jurisdiction. This Circular is being made available to you for information purposes only to enable you to consider the Proposals and Proposed Grant at the forthcoming EGM.
3.2 Basis and justification for the RCPS-i Issue Price, Implied Conversion Price and Conversion Ratio
3.2.1 RCPS-i Issue Price
The RCPS-i Issue Price represents the TERP of SEB Shares of RM0.41 based on the five (5)-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.
The RCPS-i Issue Price was determined after taking into consideration the following:
(i) TERP of SEB Shares based on the five (5)-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59; and
(ii) prospects of our Group after the completion of the Proposed Rights Issue.
8
9
3.2.2 Implied Conversion Price and Conversion Ratio
The Implied Conversion Price was determined based on the RCPS-i Issue Price and the Conversion Ratio, and represents the TERP of SEB Shares. The Conversion Ratio and/or the Implied Conversion Price were determined after taking into consideration the following: (i) TERP of SEB Shares of RM0.41 based on the five (5)-day VWAMP
of SEB Shares up to and including the Announcement LTD of RM0.59; and
(ii) timing restriction imposed on the conversion of RCPS-i into new SEB
Shares. Assuming all the RCPS-i issued pursuant to the Proposed Rights Issue of RCPS-i are converted, a total of 2,396,862,035 new SEB Shares will be issued.
3.3 Ranking of the Conversion Shares
The Conversion Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Conversion Shares.
3.4 Listing of the RCPS-i and Conversion Shares
Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the admission of 2,396,862,035 RCPS-i to the Official List of Bursa Securities and thelisting of 2,396,862,035 RCPS-i and 2,396,862,035 Conversion Shares on the Main Market of Bursa Securities, subject to the conditions set out in Section 12 of Part A of this Circular.
3.5 Shareholders’ undertaking and underwriting arrangement
The Proposed Rights Issue of RCPS-i will be undertaken on full subscription basis.
Our Company has procured the PNB Undertaking and the Funds’ Undertaking in respect of the Proposed Rights Issue of RCPS-i, pursuant to which PNB and ART, acting in its capacity as trustee of the Funds, irrevocably undertakes that:
(i) PNB and the Funds will subscribe in full for all the RCPS-i that PNB and the Funds shall be entitled to under the Proposed Rights Issue of RCPS-i as at the Entitlement Date; and
(ii) PNB Group will, at an allocation to be determined later, subscribe for all the remaining RCPS-i not taken up or not validly taken up by other Entitled Shareholders and/or their renouncees by way of excess application.
The undertakings from PNB and ART are subject to and conditional upon all regulatory and other required approvals having been obtained by our Company for the Proposed Rights Issue as set out in Section 12 of Part A of this Circular.
As the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-i to be undertaken on a full subscription basis, our Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
9
10
11
4. DETAILS OF THE PROPOSED EXEMPTION
4.1 Background information on the Proposed Exemption
The shareholdings of the PNB Group in our Company as at the LPD are as follows:
No. of SEB Shares
Shareholding in SEB
(‘000) %
PNB 19,641 0.33
ART - ASB 387,000 6.46
ART - Amanah Saham Malaysia 2 - Wawasan(formerly known as Amanah Saham Wawasan 2020)
83,000 1.39
ART - Amanah Saham Malaysia 93,154 1.55
ART - Amanah Saham Malaysia 3 (formerly known as Amanah Saham 1Malaysia)
65,456 1.09
ART - Amanah Saham Bumiputera 3 - Didik(formerly known as Amanah Saham Didik)
37,554 0.63
ART - Amanah Saham Bumiputera 2 9,000 0.15
ART - Amanah Saham Nasional 7,741 0.13
ART - ASN Equity 2 (formerly known as Amanah Saham Nasional 2)
3,674 0.06
ART - ASN Imbang (Mixed Asset Balanced) 1(formerly known as Amanah Saham Nasional 3 Imbang)
7,390 0.12
ART - ASN Equity 3 (formerly known as Amanah Saham Kesihatan)
9,533 0.16
ART - ASN Imbang (Mixed Asset Balanced) 2(formerly known as Amanah Saham Pendidikan)
4,762 0.08
PNB - Bumiputera Wealth Fund 500 0.01
PNB Group 728,405 12.16
The Proposed Exemption is being sought by the PNB Group pursuant to:
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date; and/or
11
12
(ii) where ASB individually and/or the PNB Group collectively holds more than 33% but less than 50% of the enlarged issued share capital of SEB, an increase in the individual shareholding of ASB and/or collective shareholding of the PNBGroup by more than 2% of the enlarged issued share capital of SEB in any period of six (6) months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-iMaturity Date.
For the avoidance of doubt, save for ASB, none of the shareholding of the other members of the PNB Group is expected to exceed 33%.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNBGroup collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group breaches the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
4.2 Mandatory Offer and exemption sought
The obligation to undertake the Mandatory Offer will depend upon, among others, the actual subscription rate of the Rights Shares and exercise of the Warrants by the Entitled Shareholders and/or their renouncees.
The maximum direct shareholdings of ASB individually and the PNB Group collectively after the Proposed Rights Issue, full exercise of the Warrants and conversion of the RCPS-i have been illustrated based on the following scenarios:
Scenario 1 ASB individually and the PNB Group collectively triggering the Mandatory Offer obligation
(i) STSB subscribes for RM300 million worth of Rights Shares with Warrants and PNB and the Funds subscribe in full for all the Rights Shares with Warrants and RCPS-i that they are entitled to under the Proposed Rights Issue as at the Entitlement Date pursuant to the Undertakings;
(ii) save for the subscription by the Undertaking Shareholders as disclosed in item (i) above, none of the other Entitled Shareholders subscribe for their respective entitlements under the Proposed Rights Issue and the shareholdings of the other Entitled Shareholders in SEB remain unchanged;
(iii) in respect of the committed excess application under the PNB Undertaking and the Funds’ Undertaking, only ASB subscribes for (a) the Excess Rights Shares resulting in the PNB Group having shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue of Shares with Warrants; and (b) all the remaining RCPS-i not taken up or not validly taken up by other Entitled Shareholders and/or their renouncees by way of excess application under the Funds’ Undertaking;
(iv) all outstanding RCPS-i are mandatorily converted into new SEB Shares on the RCPS-i Maturity Date; and
12
13
14
Scen
ario
1 -
ASB
indi
vidu
ally
and
the
PNB
Gro
up c
olle
ctiv
ely
trig
gerin
g th
e M
anda
tory
Offe
r obl
igat
ion
Dire
ct s
hare
hold
ing
in
our C
ompa
ny a
s at
th
e LP
D
Max
imum
dire
ct
shar
ehol
ding
afte
r the
Pr
opos
ed R
ight
s Is
sue
of S
hare
s w
ith
War
rant
s (1
)
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
Pr
opos
ed R
ight
s Is
sue
of R
CPS
-i
Max
imum
dire
ct
shar
ehol
ding
afte
rth
e co
nver
sion
of t
he
RC
PS-i
(2)
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
fu
ll ex
erci
se o
f the
W
arra
nts
by A
SB o
nly(3
)
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
full
exer
cise
of t
he W
arra
nts
by
the
PNB
Gro
up (o
ther
than
A
SB)
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
AR
T -A
SB
387,
000
6.46
5,48
2,05
3 34
.31
5,48
2,05
334
.31
7,74
2,55
3 42
.13
8,25
2,05
8 43
.70
8,25
2,05
843
.56
PN
B G
roup
728,
405
12.1
66,
391,
632
40.0
06,
391,
632
40.0
08,
788,
494
47.8
39,
297,
999
49.2
3(4
)9,
354,
817
49.3
9
Not
es:
(1)
Ass
umin
g th
e al
loca
tion
of 5
,095
.0 m
illio
n R
ight
s Sh
ares
and
568
.2 m
illio
n R
ight
s Sh
ares
to A
SB
and
the
PN
B G
roup
(oth
er th
an A
SB
), re
spec
tivel
y, p
ursu
ant t
o th
e P
NB
Und
erta
king
and
the
Fund
s’ U
nder
taki
ng.
(2)
Ass
umin
g th
e co
nver
sion
of 2
,260
.5 m
illio
n R
CP
S-i
and
136.
4 m
illio
n R
CP
S-i
into
new
SE
B S
hare
s, b
eing
the
num
ber o
f RC
PS
-i to
be
subs
crib
ed b
y AS
B a
nd th
e P
NB
Gro
up (o
ther
than
AS
B),
resp
ectiv
ely,
pur
suan
t to
the
PN
B U
nder
taki
ng a
nd th
e Fu
nds’
Und
erta
king
. (3
)A
ssum
ing
the
exer
cise
of 5
09.5
mill
ion
War
rant
s in
to n
ew S
EB S
hare
s, b
eing
the
num
ber o
f War
rant
s to
be
allo
cate
d to
AS
B p
ursu
ant t
o th
e Fu
nds’
Und
erta
king
.(4
)A
ssum
ing
the
exer
cise
of 5
6.8
mill
ion
War
rant
s in
to n
ew S
EB
Sha
res,
bei
ng th
e nu
mbe
r of W
arra
nts
to b
e al
loca
ted
to th
e P
NB
Gro
up (o
ther
than
AS
B) p
ursu
ant t
o th
e P
NB
Und
erta
king
and
the
Fund
s’ U
nder
taki
ng.
Scen
ario
2 –
The
PN
B G
roup
col
lect
ivel
y (w
ith n
o in
divi
dual
mem
ber o
f the
PN
B G
roup
) trig
gerin
g th
e M
anda
tory
Offe
r obl
igat
ion
Dire
ct s
hare
hold
ing
in o
ur C
ompa
ny a
s at
the
LPD
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
Pr
opos
ed R
ight
s Is
sue
of S
hare
s w
ith
War
rant
s
Max
imum
dire
ct
shar
ehol
ding
afte
rth
e Pr
opos
ed R
ight
s Is
sue
of R
CPS
-i
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
co
nver
sion
of t
he
RC
PS-i
Max
imum
dire
ct
shar
ehol
ding
afte
r the
fu
ll ex
erci
se o
f the
W
arra
nts
by A
SB o
nly(3
)
Max
imum
dire
ct
shar
ehol
ding
afte
rthe
full
exer
cise
of t
he W
arra
nts
by
the
PNB
Gro
up (o
ther
than
A
SB)
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
PN
B G
roup
728,
405
12.1
6(1
) 6,3
91,6
3240
.00
6,39
1,63
240
.00
(2) 8
,788
,494
47.8
39,
297,
999
49.2
3(4
)9,
354,
817
49.3
9
Not
es:
(1)
Ass
umin
g th
e al
loca
tion
of 5
,663
.2 m
illio
n R
ight
s Sh
ares
to th
e P
NB
Gro
up p
ursu
ant t
o th
e P
NB
Und
erta
king
and
the
Fund
s’ U
nder
taki
ng.
(2)
Ass
umin
g th
e co
nver
sion
of 2
,396
.9 m
illio
n R
CP
S-i
into
new
SE
B S
hare
s, b
eing
the
num
ber
of R
CP
S-i
to b
e su
bscr
ibed
by
the
PN
B G
roup
pur
suan
t to
the
PN
B U
nder
taki
ng a
nd th
e Fu
nds’
Und
erta
king
. (3
)A
ssum
ing
the
exer
cise
of 5
09.5
mill
ion
War
rant
s in
to n
ew S
EB S
hare
s, b
eing
the
num
ber o
f War
rant
s to
be
allo
cate
d to
AS
B p
ursu
ant t
o th
e Fu
nds’
Und
erta
king
.(4
)A
ssum
ing
the
exer
cise
of 5
6.8
mill
ion
War
rant
s in
to n
ew S
EB
Sha
res,
bei
ng th
e nu
mbe
r of W
arra
nts
to b
e al
loca
ted
to th
e P
NB
Gro
up (o
ther
than
AS
B) p
ursu
ant t
o th
e P
NB
Und
erta
king
and
the
Fund
s’ U
nder
taki
ng.
14
15
Based on the above, the shareholdings of ASB individually and/or the PNB Group collectively may increase to above 33% of the enlarged issued share capital of our Company upon completion of the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking resulting in a Mandatory Offer obligation being triggered. Further, ASB individually and/or the collective shareholding of the PNB Group may increase by more than 2% of the enlarged issued share capital of our Company over a six (6)-month period, after the completion of the Proposed Rights Issue, upon exercise of the Warrants or conversion of the RCPS-i. Accordingly, the PNB Group may be obliged to undertake the Mandatory Offer pursuant to Section 218(2) of the CMSA and Paragraphs 4.01(a) and 4.01(b) of the Rules.
As it is not the intention of the PNB Group to undertake the Mandatory Offer, the PNBGroup intends to seek an exemption from the SC pursuant to the Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
An application for the Proposed Exemption will only be submitted to the SC by PNB on behalf of the PNB Group after the approval of the non-interested shareholders of SEB has been obtained at the forthcoming EGM.
The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights Issue of Shares with Warrants and the Proposed Rights Issue of RCPS-i will not be implemented.
5. DETAILS OF THE PROPOSED ESOS
The Proposed ESOS involves the granting of Options to the senior management and Executive Directors of our Participating Group who meet the criteria of eligibility for participation as set out in the By-Laws to subscribe for new SEB Shares at specified prices.
For the avoidance of doubt, the ESOS Options will not be granted to the Non-Executive Directors of our Company. The Proposed ESOS will be administered by the ESOS Committee and governed by the By-Laws. Under the Proposed ESOS, an Eligible Person may from time to time within the duration of the Proposed ESOS, at the discretion of the ESOS Committee, be granted the Offer. In this respect, the Proposed ESOS is expected to be effective after the forthcoming EGM and approval of the SC for the Proposed Exemption but prior to the completion of the Proposed Rights Issue. In the event that the Offer is granted prior to the Entitlement Date, the Options Exercise Price will be subject to adjustments, at the determination of the ESOS Committee, arising from the alteration of our Company’s share capital by way of the Proposed Rights Issue in accordance with the provision of the By-Laws. Our Company has on 1 December 2014 established the LTIP following the approval from our shareholders in 2014. The LTIP is for a period of seven (7) years and will expire on 30 November 2021. Under the LTIP, each grant of SEB Shares are subject to a certain vesting period and conditions before new SEB Shares are issued to the grantees. Although the maximum number of SEB Shares which may be issued under the LTIP is up to 5% of the issued share capital of SEB, as at the LPD, our Company has not granted any SEB Shares pursuant to the LTIP. A summary of the information on the LTIP is set out in Appendix IV of this Circular.
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The salient features of the Proposed ESOS are as follows:
5.1 Maximum number of new SEB Shares available under the Proposed ESOS
The maximum number of new SEB Shares which may allotted and issued pursuant to the exercise of the Options that may be granted under the Proposed ESOS shall not in aggregate exceed the Maximum Shares at any point in time during the duration of the Proposed ESOS.
5.2 Maximum allowable allotment and basis of allocation
Subject to any adjustments which may be made under the By-Laws, the maximum number of Options that may be granted under the Proposed ESOS to any one (1) Eligible Person shall be at the sole and absolute discretion of the ESOS Committee after taking into consideration the position, performance and length of service of the Eligible Person in our Participating Group, and/or such other factors which the ESOS Committee may in its absolute discretion deem fit, subject to the following:
(i) the senior management and Executive Directors of our Participating Group do not participate in the deliberation or discussion in respect of his/her own allocation; and
(ii) the number of new SEB Shares to be allocated to any Eligible Person who, either singly or collectively through persons connected with such Eligible Person, holds twenty percent (20%) or more of the total issued SEB Shares(excluding treasury shares, if any), does not exceed ten percent (10%) (or such percentage as allowable by the relevant authorities) of the total number of newSEB Shares to be issued under the Proposed ESOS,
provided always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other requirements of the relevant authorities and as amended from time to time.
Pursuant to Paragraph 6.06(1) of the Listing Requirements, the participation by each of the Directors, chief executive and major shareholders of our Company and/or persons connected with them (if any) in the Proposed ESOS must be approved by the shareholders of our Company in a general meeting. Accordingly, our Company will seek the approval of our shareholders for the Proposed Grant, subject to Sections 5.2 (i) and (ii) above.
For the avoidance of doubt, the ESOS Committee shall have the sole and absolute discretion in determining whether the Options are to be granted to the Eligible Persons via:
(a) one (1) single Offer at a time determined by the ESOS Committee; or (b) several Offers where the vesting of the Options comprised in those Offers is
staggered or made in several tranches at such times and on such terms and conditions as may be determined by the ESOS Committee,
provided always that the aggregate number of new SEB Shares in respect of the Offers granted to any Eligible Person shall not exceed the amount stipulated in Sections 5.1 and 5.2(ii) above.
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In the event the ESOS Committee decides that the vesting of the Options is to be staggered or made in several tranches, the number of Options to be granted pursuant to each vesting of the Options and the timing for the vesting of the same shall be decided by the ESOS Committee at its sole and absolute discretion and each vesting of the Options shall be separate and independent from the others.
As at the LPD, our Company has yet to ascertain any performance targets required to be met and vesting period before the Options can be granted and/or exercised by a Grantee. In any event, such performance targets and vesting period, if any, will be determined by the ESOS Committee.
5.3 Eligibility
Subject to the discretion of the ESOS Committee, any senior management and/orExecutive Director of our Participating Group shall be eligible to participate in the Proposed ESOS if, as at the Date of Offer, that person:
(i) has attained at least eighteen (18) years of age and is not an undischarged bankrupt nor subject to any bankruptcy proceedings;
(ii) if he/she is a senior management, he/she is employed on a full time basis and is on the payroll of any company in our Participating Group, and his/her employment has been confirmed by such company in our Participating Group;
(iii) if he/she is a senior management, he/she is serving in a specific designation under an employment contract for a fixed duration and has been in the employment of our Participating Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;
(iv) if he/she is an Executive Director, he/she has been serving our Participating Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;
(v) if he/she is an Executive Director of our Company, the allocation of the Options granted to him/her in his/her capacity as an Executive Director of our Company under the Proposed ESOS has been approved by the shareholders of our Company at a general meeting; and
(vi) fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee at its absolute discretion for purposes of selecting an Eligible Person from time to time.
Eligibility under the Proposed ESOS however does not confer upon an Eligible Person a claim or right to participate in the Proposed ESOS or any rights whatsoever under the Proposed ESOS and an Eligible Person does not have any rights over or in connection with the Options or the new SEB Shares comprised therein unless an Offer has been made in writing by the ESOS Committee to that Eligible Person and the Eligible Person has accepted the Offer in accordance with the By-Laws.
5.4 Option Exercise Price
The Option Exercise Price shall be determined by our Board upon recommendation of the ESOS Committee, subject always to such adjustments as may be made in accordance with the provisions of the By-Laws, based on the five (5)-day WAMP of SEB Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer with a discount of not more than ten percent (10%) or such other percentage of discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the Proposed ESOS.
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5.5 Duration and termination of the Proposed ESOS
The Proposed ESOS shall take effect on a date to be determined by the ESOS Committee following full compliance with the following relevant requirements prescribed under the Listing Requirements:
(i) approval of Bursa Securities for the listing of the new SEB Shares to be issued
pursuant to the exercise of the Options being obtained;
(ii) approval of the shareholders of our Company for the Proposed ESOS at the forthcoming EGM being obtained;
(iii) submission to Bursa Securities of the final copy of the By-Laws together with a letter of compliance pursuant to Paragraph 2.12 of the Listing Requirements and a checklist showing compliance with Appendix 6E of the Listing Requirements (and/or such other documents as may be determined by Bursa Securities from time to time);
(iv) approval of any other relevant authorities, where applicable, being obtained; and
(v) fulfilment or waiver (as the case may be) of all applicable conditions attached to the above approvals (if any).
The Proposed ESOS shall be in force for a period of seven (7) years from the Effective Date.
Subject to a notice period of at least thirty (30) days being provided, and in compliance with the existing guidelines or directives of Bursa Securities or any other regulatory authorities, the Proposed ESOS may be terminated by the ESOS Committee at any time during the duration of the Proposed ESOS and our Company shall make an announcement immediately through Bursa Securities. The announcement shall include:
(i) the effective date of termination; (ii) the number of Options exercised and/or vested; and
(iii) the reasons for termination.
5.6 Ranking of new SEB Shares to be issued upon exercise of the Options
The new SEB Shares to be allotted and issued upon exercise of the Options shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of the new SEB Shares.
5.7 Retention period
The Grantee must not sell, transfer or assign any new SEB Shares obtained through the exercise of the Options offered to him under the Proposed ESOS within three (3) years from the Date of Offer.
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5.8 Alteration of share capital during the Option Period
In the event of any alteration in the capital structure of our Company during the duration of the Proposed ESOS, whether by way of capitalisation of profits or reserves, rights issue, bonus issue, reduction, subdivision or consolidation of capital or any other variations of capital, the ESOS Committee shall have the discretion, in accordance with the provision of the By-Laws, to make adjustments to:
(i) the Options Exercise Price; and/or
(ii) the number of Shares comprised in the Option or any portion thereof which have not been exercised; and/or
(iii) the number of SEB Shares and/or Options Exercise Price comprised in an Offer which is open for acceptance (if such Offer is subsequently accepted in accordance with the terms and conditions of the Offer and the By-Laws).
Alteration of share capital does not apply to, among others, issuance of securities as consideration for an acquisition, pursuant to a special issue or private placement or any purchase by our Company of SEB Shares or any conversion of convertibles.
Save for a bonus issue, subdivision or consolidation of Shares, such adjustments must be confirmed in writing by the external auditors of our Company for the time being (acting as experts and not as arbitrators) or the principal adviser upon reference to them by the ESOS Committee, to be in their opinion, fair and reasonable.
5.9 Modification, variation and/or amendments to the Proposed ESOS
Subject to compliance with the Listing Requirements and the approval of any other authorities, the ESOS Committee may from time to time recommend to our Board any additions, modifications and amendments to or deletions of the By-Laws as it shall in its discretion think fit.
The approval of our shareholders in a general meeting shall not be required in respect of additions or amendments to or deletions of the By-Laws provided that no additions, amendments or deletions shall be made to the By-Laws which would:
(i) prejudice any rights which would have accrued to any Grantee without his/her
prior consent; or
(ii) increase the number of Shares to be issued pursuant to the exercise of the Options available under the Proposed ESOS beyond the Maximum Shares; or
(iii) alter any matter which are required to be contained in the By-Laws by virtue of the Listing Requirements to the advantage of the Eligible Person and/or Grantee.
5.10 Listing of the new SEB Shares to be issued pursuant to the exercise of the Options
Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the listing of such number of new SEB Shares to be issued pursuant to the Proposed ESOS, representing up to ten percent (10%) of the total issued SEB Shares (excluding treasury shares, if any) at any point in time on the Main Market of Bursa Securities, subject to the conditions set out in Section 12 of Part A of this Circular.
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6. DETAILS OF THE PROPOSED AMENDMENTS
The Proposed Amendments entail the amendments to be made to our Constitution to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of RCPS-i and serving of notices by electronic form, details of which are set out in Appendix V of this Circular.
7. USE OF PROCEEDS
7.1 Proposed Rights Issue
The Proposed Rights Issue is expected to raise gross proceeds of approximately RM3,978.8 million, the breakdown of which is as follows:
Amount
(RM‘000)
Proceeds from the Proposed Rights Issue of Shares with Warrants 2,996,077.5Proceeds from the Proposed Rights Issue of RCPS-i 982,713.5Total gross proceeds 3,978,791.0
The total gross proceeds are expected to be used in the following manner:
Description of use of proceeds
Estimated timeframe for use of proceeds from the date of listing of the Rights Shares,
Warrants and RCPS-i Amount
(RM‘000)
Part repayment of the bank borrowings of our Group (1)
Within four (4) months 3,957,949.5
Defray estimated expenses relating to the Proposals (2)
Within one (1) month 20,841.5
Total gross proceeds 3,978,791.0
Notes:
(1) As at the LPD, the total borrowings of our Group is approximately RM17,215.0 million.The proceeds from the Proposed Rights Issue will be used to partly repay the amount due to lenders of multi-currency term facilities which primarily was used for the following:
(a) USD1,737 million (RM5,727 million) to refinance a bridging facility which was used to part finance the acquisition of the tender rig business i.e. Seadrill Tender Rig Limited for USD2,646 million (RM8,032 million), which was completed in 2013; and
(b) USD899 million (RM2,974 million) to finance the acquisition of the E&Pbusiness i.e. Newfield Malaysia Holdings Inc. (currently known as SEP Malaysia) for USD896 million and transaction costs of USD3 million, which was completed in 2014.
The part repayment of the bank borrowings of our Group is expected to result in savings in finance cost of approximately RM174.2 million per annum based on an interest rate of approximately 4.4% per annum.
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The breakdown of the total bank borrowings of our Group as at the LPD is as follows:
Amount(USD‘000) (RM‘000)
Bank borrowings denominated in USD 2,652,857 11,099,552 Bank borrowings denominated in RM 1,512,527 6,328,413 Less: unamortised transaction costs (50,909) (213,002)
Total 4,114,475 17,214,963
(2) Comprising professional fees, underwriting commission, fees payable to the relevant authorities, printing and despatch costs of this Circular and the abridged prospectus, advertising cost and cost of convening the forthcoming EGM, as follows:
Amount(RM‘000)
Professional fees 2,950.0Underwriting commission 15,840.0Fees payable to the relevant authorities 535.6Printing and despatch cost of this Circular and the abridged prospectus, advertising cost and cost of convening the forthcoming EGM
1,515.9
Total 20,841.5
Part of the proceeds from the Proposed Rights Issue of Shares with Warrants will be used to fund the estimated expenses relating to the Proposals.
The proceeds to be raised by our Company from the exercise of the Warrants are dependent on the total number of the Warrants exercised during the Exercise Period.Proceeds arising from the exercise of the Warrants will be used to satisfy the future working capital requirements of our Group and/ or repayment of borrowings, as the case may be.
Pending use of the proceeds as set out above, our Company will place the proceeds in interest-bearing deposits with financial institutions and/or short-term money market instruments as our Board deems fit. Further, proceeds from the Proposed Rights Issue of RCPS-i will be placed in deposits with Islamic financial institutions and/or Islamic short-term money market instruments. The interest derived from deposits with financial institutions and/or any gains arising from short-term money market instruments will be used for working capital purposes.
There will be no proceeds raised upon conversion of the RCPS-i into new SEB Shares, as the conversion will be satisfied by surrendering such number of RCPS-i to be converted, based on the Conversion Ratio.
7.2 Proposed ESOS
The proceeds to be raised by our Company from the exercise of the Options are dependent on the total number of Options granted and exercised, and the Options Exercise Price. As such, the amount of proceeds arising from the exercise of the Options and the time frame for use of such proceeds cannot be determined at this juncture. Proceeds arising from the exercise of the Options will be used to satisfy the future working capital requirements of our Group, if any.
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8. RATIONALE AND BENEFITS OF THE PROPOSALS
Our Group currently has three distinct business divisions, namely E&P, drilling and E&C. Over the years, each of these divisions have emerged as leaders in their respective segments and are recognised by clients for their delivery and safety performance. Currently, these divisions are funded centrally by our Group. Each of these divisions have differing growth aspirations, capital requirements and risk-reward profiles. After taking into consideration the recovery of the oil and gas industry, our Group has formulated a strategic plan that will enable these business segments to operate independently. The plan includes the Proposals and may involve a strategic partnership for our E&P business pursuant to our Company’s announcement dated 12 September 2018, details of which are set out in Section 10.3 of Part A of this Circular, as well as exploring a possible strategic partnership for our drilling business which would result in the strengthening of our Group’s core businesses.
The primary objective of the Proposals which include the Proposed Rights Issue is to reduce the borrowings of our Group, so as to strengthen our balance sheet. The stronger balance sheet would enable our Group to bid and undertake higher value projects globally. In addition, our Group will benefit from savings in financing cost arising from the lower borrowings of approximately RM174.2 million per annum. Accordingly, the Proposed Rights Issue is expected to provide our Group greater financial flexibility in pursuing and executing projects in conjunction with the improving prospects of the oil and gas industry, and improve earnings through the reduction in interest expenses.
8.1 Proposed Rights Issue of Shares with Warrants
After taking into consideration our gearing level, our Board is of the opinion that the Proposed Rights Issue of Shares with Warrants is the most appropriate means of raising funds due to the following reasons: (i) it enables our Company to raise proceeds to be used in the manner set out in
Section 7.1 of Part A of this Circular;
(ii) the Proposed Rights Issue of Shares with Warrants will further strengthen our Company’s capital base and at the same time, improve our gearing level following the reduction in the borrowings of our Group;
(iii) it provides the Entitled Shareholders with an opportunity to further increase their equity participation in our Company’s future growth and prospects amidst the gradual recovery of the oil and gas industry via subscription of the Rights Shares at the Rights Issue Price, which represents a discount to the prevailing market price of the SEB Shares, without diluting their respective equity interest, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares; and
(iv) the Warrants attached to the Rights Shares is intended to reward and provide
the Entitled Shareholders with an option to further increase their equity participation in our Company by exercising their Warrants during the Exercise Period. The exercise of the Warrants will also strengthen the capital base of our Company and provide additional funds to our Group. In addition, the Warrants will be listed and traded separately from the SEB Shares on Bursa Securities thereby providing holders of the Warrants with an avenue to monetise the Warrants should they choose to do so.
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8.2 Proposed Rights Issue of RCPS-i
The Proposed Rights Issue of RCPS-i will enable our Company to raise the requisite funds without our Company being over-capitalised after taking into consideration the new SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants, given our Company’s right (without obligation) to redeem the RCPS-i which will allow us to manage our share base.
8.3 Proposed Exemption
The Proposed Exemption will relieve the PNB Group from the obligation to undertake the Mandatory Offer as the PNB Group does not intend to undertake the Mandatory Offer.
8.4 Proposed ESOS
Our Board is proposing to establish the Proposed ESOS to complement the LTIP to continue driving desired corporate outcomes for long term growth and sustainability. The Proposed ESOS is intended to:
(i) promote enterprise leadership currently under the stewardship of the current management team to drive returns and achievement of our Company’s long term goals;
(ii) strengthen our senior management and Executive Director’s alignment to the long term objectives and business plan of our Company as well as overall shareholders’ interest;
(iii) instil a greater sense of ownership and belonging to enhance productivity and motivate our senior management and Executive Director towards our Company’s strategic business objectives since they will have an opportunity to participate directly in the future growth of our Group; and
(iv) create a more competitive total compensation package for performing senior management and Executive Director and strengthen retention effort.
8.5 Proposed Amendments
The Proposed Amendments are meant to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of RCPS-i and serving of notices by electronic form.
9. FOREIGN ADDRESSED SHAREHOLDERS
The abridged prospectus together with the accompanying documents to be issued in connection with the Proposed Rights Issue have not been prepared to, and no step or action will be taken to, ensure that such documents comply with the laws of any countries or jurisdictions other than Malaysia, and have not been and will not be lodged, registered or approved under any applicable securities legislation of any countries or jurisdictions other than Malaysia. The Proposed Rights Issue will not be offered for purchase or subscription in any country or jurisdiction in which such offer would be unlawful prior to registration or qualification under the securities laws of such country or jurisdiction.
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The abridged prospectus together with the accompanying documents will only be sent to Entitled Shareholders who have a registered address or an address for service in Malaysia as registered in our Record of Depositors as at the Entitlement Date. Foreign Addressed Shareholders who wish to provide a Malaysian address should inform their respective stockbrokers to effect the change of address prior to the Entitlement Date. Alternatively, such Foreign Addressed Shareholders may collect the abridged prospectus from our share registrar who shall be entitled to request for such evidence as they deem necessary to satisfy themselves as to the identity and authority of the person collecting the abridged prospectus together with the accompanying documents.
Our Company will not make or be bound to make any enquiry as to whether the Entitled Shareholders have a registered address other than as stated in our Record of Depositors as at the Entitlement Date and will not accept or be deemed to accept any liability whether or not any enquiry or investigation is made in connection therewith.
Foreign Addressed Shareholders may only exercise their rights in respect of the Proposed Rights Issue to the extent that it would be lawful to do so, and our Company, our share registrar and/or our advisers, in connection with the Proposed Rights Issue, would not be in breach of the laws of any country or jurisdiction which the Foreign Addressed Shareholders and Proposed Rights Issue and/or their renouncees might be subject to. No securities of our Company, including the Rights Shares with Warrants, and RCPS-i, have been or will be registered under the U.S. Securities Act, and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. Any securities offered pursuant to the Proposed Rights Issue will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. Copies of the abridged prospectus and accompanying documents will not be distributed in the United States or in any other jurisdiction where such distribution would be unlawful.
Foreign Addressed Shareholders will be responsible for payment of any issue, transfer or any other taxes or other requisite payments due in such foreign country or jurisdiction and ourCompany shall be entitled to be fully indemnified and held harmless by such Foreign Addressed Shareholders for any issue, transfer or any other taxes or duties as such person may be required to pay. They will have no claims whatsoever against our Company, our share registrar and/or our advisers in respect of their rights or entitlements under the Proposed Rights Issue. Such Foreign Addressed Shareholders should also consult their professional advisers as to whether they require any governmental, exchange control or other consents or need to comply with any other applicable legal requirements to enable them to exercise their rights in respect of theProposed Rights Issue.
Foreign Addressed Shareholders shall be solely responsible to seek advice as to the laws of any country or jurisdiction to which they may be subject, and participation by the Foreign Addressed Shareholders in the Proposed Rights Issue shall be on the basis of a representation and warranty by them that they may lawfully so participate without our Company, our share registrar and/or our advisers being in breach of the laws of any country or jurisdiction.
None of our Company, our share registrar nor our advisers to the Proposed Rights Issue shall accept any responsibility or liability in the event that any acceptance of a Foreign Addressed Shareholder or his/her renouncees of his/her entitlements in respect of the Proposed Rights Issue is or shall become illegal, unenforceable, voidable or void in any country or jurisdiction.
Our Company reserves the right in its absolute discretion to treat any acceptance as being invalid if our Company believes or has reason to believe that such acceptance may violate any applicable legal or regulatory requirements.
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10. INDUSTRY OVERVIEW AND PROSPECTS
10.1 Overview and outlook of the global economy
Global growth has eased but remains robust and is projected to reach 3.1% in 2018. It is expected to edge down in the next two years to 2.9% by 2020.
In advanced economies, growth remains above potential despite signs of softening. In the United States, significant fiscal stimulus will boost near-term activity. As the recovery matures over the forecast horizon and monetary policy accommodation is pared down, growth is projected to moderate toward its potential rate. As fiscal stimulus measures have been introduced and inflation has moved toward target, the Federal Reserve has signaled a faster pace of policy tightening. Recent trade policy changes are not expected to have a substantial effect on United States growth, which is projected to reach 2.7% in 2018 and edge down to 2.5% in 2019. As fiscal and monetary stimulus fade, growth is forecast to slow to 2% in 2020, above the mid-point of the 1% to 2.4% range of estimates of its potential pace.
The Euro Area economy grew 2.4% in 2017, its fastest increase since the financial crisis, reflecting strong consumption, investment, and exports. However, data releases since the start of 2018 point to decelerating activity. Headline inflation stands at 1.2%, well under the central bank target of close to, but below, 2%. Amid continued monetary policy stimulus, growth is projected to be 2.1% in 2018. It is forecast to slow to 1.7% in 2019 and 1.5% in 2020, as slack dissipates, higher oil prices weigh on consumption.
Growth in Japan reached 1.7% in 2017, underpinned by supportive financial conditions and strong exports, but contracted at the beginning of this year. Over the forecast period, growth is expected to decelerate to 1% in 2018, 0.8% in 2019, and 0.5% in 2020, as higher oil prices erode real incomes, employment growth slows, and fiscal consolidation starts to drag on growth, notably due to the effects of the value added tax hike scheduled for late 2019. The long-term growth outlook remains constrained by an aging and shrinking labor force.
In China, growth remains solid and is expected to gradually slow as rebalancing continues. Growth in China reached 6.9% in 2017 and has remained solid this year. China’s growth is projected to edge down to 6.5% in 2018 and slow further to 6.3% on average in 2019-20, as export growth moderates and deleveraging takes hold.
Growth in emerging and developing economics (“EMDE”) accelerated to 4.3% in 2017 and has generally continued to firm in 2018. EMDE growth is expected to reach 4.5% in 2018. The rebound in commodity exporters has continued, and activity in commodity importers remains robust. Beyond this year, however, EMDE growth is projected to strengthen only slightly, approaching its potential pace, as the recovery in commodity exporters matures. Activity continues to show resilience in a number of more diversified economies and agriculture exporters (e.g., Benin, Burkina Faso, Côte d’Ivoire, Ethiopia,Indonesia, Malaysia, Morocco, Senegal, Uganda), supported by higher metals prices, growth among metals exporters continues to improve, albeit at varying degrees, reflecting country-specific conditions.
(Source: World Bank. 2018. Global Economic Prospects, June 2018: The Turning of the Tide? Washington, DC: World Bank. doi: 10.1596/978-1-4648-1257-6. License: Creative Commons Attribution CC BY 3.0 IGO.)
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10.2 Overview and outlook of the oil and gas sector
OPEC crude oil supply rose during July with Saudi Arabia, United Arab Emirates (“UAE”), Kuwait and Iraq ramping-up output in accord with the June OPEC meeting decision to reduce compliance to production restraint. In effect, those nations that can are increasing production to offset losses in other OPEC countries such as Venezuela whose production has fallen nearly 1 million barrel per day (“b/d”) against the OPEC benchmark of output in October 2016. Key OPEC producers such as Saudi Arabia are trying to prevent sharp movements higher in crude prices that could potentially hurt global economic growth and oil demand.
Though remaining strong overall, US Lower 48 production also has a minor downward revision in this outlook due to slower activity in key tight oil plays, and Permian pipeline constraints capping the production. On the other hand, strengthening non-OPEC production growth outside of United States has lifted forecast slightly from a month ago with global supply now projected to increase by 2 million b/d growth in 2019, following a 2.1 million b/d gain in 2018.
Global supply continues to face turbulent times. The return of OPEC production has helped to offset production declines in Venezuela, and more recently Iran, as US secondary sanctions start to impact exports. Regardless, the outlook remains one of strong growth. Close to 2 million b/d of total liquids supply will be added in both 2018 and 2019, lifting global supply from 97.7 million b/d in 2017 to 99.8 million b/d in 2018 and 101.8 million b/d in 2019. Whilst the outlook for 2018 has been adjusted a little higher, 2019 has been revised up by 270 kb/d, predominantly due to stronger non-OPEC supply.
The current outlook has global oil demand marching steadily upward, breaching 100 million b/d during Q3 of this year and rising to 101 million b/d by late-2019. Demand averages 100.6 million b/d over the course of 2019, unchanged from previous forecast. Annual growth remains robust at 1.3 million b/d in both 2018 and 2019. The increase will continue to be led by the United States and India, underpinned by a relatively strong economic backdrop.
In Asia, Indian demand remains strong and the recent heat wave has boosted Japanese demand. China too contributes heavily to global demand growth, although not to the same extent as in previous years since gasoline's growth has slowed.
Petrochemical feedstocks are now driving most of China’s demand growth, with transportation fuels facing weak domestic consumption and tightening environmental policies.
Project sanctions in 1st half of 2018 are off to a blistering start. Twenty-four major fields made Final Investment Decision (“FID”) by June, up from just thirteen in the same period in 2017. The current growth engines are brownfield expansions largely concentrated in Saudi Arabia, UAE, and Iraq, where deepwater Gulf of Mexico had a more prominent role in 2017. In Q2 2018, Middle Eastern countries are focused on offshore shallow water liquids production, while major projects in Russia and Norway are almost exclusively seeking to develop gas.
Compared to 2017, a material shift has occurred in the size and scope of upstream developments. While we saw a previous focus on smaller, leaner developments, operators are now seeking higher capital intensity projects. The average project size has risen to 887 million barrels of oil equivalent, costing an average USD5.3 billion in investment. Both are up on 2017 numbers.
(Source: Wood Mackenzie Macro Oils short-term outlook report, September 2018, Wood Mackenzie Q2 2018 pre-FID upstream project tracker, August 2018)
26
27
10.3 Prospects of our Group
Amidst the rebound in oil and gas prices, our Group is well-positioned to capitalise on the emerging industry opportunities which has seen a resurgence in activities and capital spend in our services segment, comprising our E&C and drilling divisions (“Services”) and our E&P business. The positive industry outlook has continued to fuel our Group’s growth in the last 12 months.
For our Services segment, our Group’s strategy during the downturn was to strengthen our presence in existing core markets in South East Asia, Mexico, Brazil, India and Australia, while opening up new markets in Europe, Middle East, East and West Africa, Caspian and the Mediterranean.
Our Group has been successful in expanding our global footprint and securing significant wins since the start of 2018. The accumulative value in contract wins for our Group as at the LPD of RM5.3 billion, which includes those awards of contracts / subcontracts / contract extensions with a combined value of approximately RM815 million announced on 24 September 2018, represents a three-fold jump compared to the value achieved in the same corresponding period of the previous year, between February to October 2017. The strategy employed has enabled our Group to grow ourorder book to RM16.9 billion as at 31 July 2018 from RM14.9 billion as at 31 January 2018.
Our Group is entering a strong growth phase today. Our Group has been recognised for its strong track record, state-of-the-art facilities and assets as well as deep technical expertise of our people. Together with global operating centres in key regions, such as Australia, South East Asia, India, Middle East, Africa, the United Kingdom, Brazil, Mexico and the United States, our Group is poised to leverage on growth opportunities as the market recovers.
On 24 August 2018, our Company announced the Proposed Rights Issue as part of our broader strategic plan to deleverage our Group’s balance sheet. The strengthened balance sheet would enable our Services segment to bid and execute higher value projects globally. As at the LPD, our Company is in active pursuit of bids worth USD7.4 billion (equivalent to RM31.0 billion) and further prospects of USD10.2 billion (equivalent to RM42.7 billion) in the key geographical markets mentioned above.
The Proposed Rights Issue forms a key component of our Group’s continuing growth strategy and is being undertaken to provide our Group with a sustainable capital base to support its operations and growth aspirations.
Apart from the success of our Services segment, our E&P business has also seen positive results in exploration, development and production activities.
To date, our E&P business has discovered a total of 9 trillion cubic feet of gas in SK310 and SK408 fields located at offshore Sarawak, Malaysia. This success is founded on our Company’s in-house strength and capabilities of its sub-surface expertise including reservoir engineering and understanding the geological fundamentals of the region. Our Group firmly believes that we can replicate this success in new markets that we have recently ventured into including Australia, New Zealand and Mexico.
On the development front, our E&P business has commenced gas production at its SK310 B15 field in October 2017 and is currently developing the Gorek, Larak and Bakong fields as part of phase 1 of its SK408 gas field development project. The SK408 field will commenced production in late 2019 or early 2020 which will contribute to an increase in net production volumes for our E&P business.
27
28
On 12 September 2018, our Company announced that, as part of our strategic plan, we have entered into a Heads of Agreement with Austria’s OMV Aktiengesellchaft (“OMV AG”) to form a strategic partnership (“HOA”). Under the proposed terms, OMV AG intends to acquire 50% equity in our Company’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, which is involved in E&P activities based on an agreed enterprise value of USD1.6 billion (equivalent to RM6.7 billion) (“Proposed Strategic Partnership”). Subsequent to that, our Company entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The net proceeds from the Proposed Strategic Partnership are intended to be used for the repayment of borrowings and for working capital requirements.
By joining forces, our Company and OMV AG will be strategically positioned to create sustainable long-term growth, expand portfolios and future business activities as well as realise synergies in the value chain.
The partnership with OMV AG complements our Group’s continued strategy to grow our portfolio and expand our acreage position.
11. EFFECTS OF THE PROPOSALS
The Proposed Exemption and Proposed Amendments will not have any effect on the share capital and substantial shareholders’ shareholdings of our Company and NA per SEB Share, gearing and EPS of our Group.
For illustrative purposes only, the effects of the Proposed Rights Issue and Proposed ESOS on the share capital and substantial shareholders’ shareholding have been shown based on the following sequence:
Scenario A : completion of the Proposed Rights Issue followed by the exercise of the ESOS Options, conversion of the RCPS-i and exercise of the Warrants.
Scenario B : completion of the Proposed Rights Issue followed by the conversion of the RCPS-i, exercise of the Warrants and exercise of the ESOS Options.
11.1 Share capital
The Proposed ESOS will not have an immediate effect on the issued share capital of our Company until such time when the new SEB Shares are issued pursuant to the exercise of the ESOS Options. The issued share capital of our Company will increase progressively as and when new SEB Shares are issued arising from the exercise of the ESOS Options. In any case, the new Shares to be issued pursuant to the exercise of the ESOS Options shall not exceed the Maximum Shares.
28
29
The pro forma effects of the Proposed Rights Issue and Proposed ESOS on the issued share capital of our Company are as follows:
Scenario A
No. of SEB Shares Amount
No. of RCPS-i Amount
(‘000) (RM‘000) (‘000) (RM‘000)
As at the LPD 5,992,155 (1) 8,066,410 - -
To be issued pursuant to the Proposed Rights Issue of Shares with Warrants
9,986,925 (2) 2,857,571 - -
To be issued pursuant to the Proposed Rights Issue of RCPS-i
- - 2,396,862 982,713
To be issued assuming full exercise of the ESOS Options
(3) 1,597,908 (4) 495,351 - -
To be issued assuming full conversion of the RCPS-i
2,396,862 982,713 (2,396,862) (982,713)
To be issued assuming full exercise of the Warrants
998,693 489,359 - -
Transfer of warrants reserve to share capital pursuant to the full exercise of the Warrants
- (2)(5) 117,665 - -
Enlarged issued share capital 20,972,543 13,009,070 - -
Notes:
(1) Under the no par value regime of the Act which came into effect on 31 January 2017, the concept of share premium will no longer be applicable and any amount standing to the credit of our Company’s share premium account has been consolidated as part of its share capital.
(2) After deducting estimated expenses relating to the Proposals of approximately RM20.8 million.
(3) Assuming 1,597.9 million ESOS Options are granted and exercised, representing 10% of the total number of issued SEB Shares after the Proposed Rights Issue of Shares with Warrants of 15,979.1 million SEB Shares.
(4) Calculated based on an assumed Options Exercise Price of RM0.31, which represents the TERP of SEB Shares based on the five (5)-day WAMP of SEB Shares up to and including the LPD of RM0.33.
(5) Computed based on the theoretical fair value of RM0.14 per Warrant as at the LPD based on the Exercise Price measured using the Trinomial Option Pricing Model.
29
30
Scenario B
No. of SEB Shares Amount
No. of RCPS-i Amount
(‘000) (RM‘000) (‘000) (RM‘000)
As at the LPD 5,992,155 (1) 8,066,410 - -
To be issued pursuant to the Proposed Rights Issue of Shares with Warrants
9,986,925 (2) 2,857,571 - -
To be issued pursuant to the Proposed Rights Issue of RCPS-i
- - 2,396,862 982,713
To be issued assuming full conversion of the RCPS-i
2,396,862 982,713 (2,396,862) (982,713)
To be issued assuming full exercise of the Warrants
998,693 489,359 - -
Transfer of warrants reserve to share capital pursuant to the full exercise of the Warrants
- (2)(3) 117,665 - -
To be issued assuming full exercise of the ESOS Options
(4) 1,937,463 (5) 600,614 - -
Enlarged issued share capital 21,312,098 13,114,332 - -
Notes:
(1) Under the no par value regime of the Act which came into effect on 31 January 2017, the concept of share premium will no longer be applicable and any amount standing to the credit of our Company’s share premium account has been consolidated as part of its share capital.
(2) After deducting estimated expenses relating to the Proposals of approximately RM20.8 million.
(3) Computed based on the theoretical fair value of RM0.14 per Warrant as at the LPD based on the Exercise Price measured using the Trinomial Option Pricing Model.
(4) Assuming 1,937.5 million ESOS Options are granted and exercised, representing 10% of the total number of issued SEB Shares after the Proposed Rights Issue of Shares with Warrants and assuming full conversion of the RCPS-i and full exercise of the Warrants of 19,374.6 million SEB Shares.
(5) Calculated based on an assumed Options Exercise Price of RM0.31, which represents the TERP of SEB Shares based on the five (5)-day WAMP of SEB Shares up to and including the LPD of RM0.33.
30
31
11.2
Subs
tant
ial s
hare
hold
ers’
sha
reho
ldin
gs
The
Prop
osed
ESO
S is
not
exp
ecte
d to
hav
e an
y im
med
iate
effe
ct o
n th
e sh
areh
oldi
ngs
of th
e su
bsta
ntia
l sha
reho
lder
s of
our
Com
pany
unt
il su
ch t
ime
whe
n th
e ne
w S
EB
Shar
es a
re is
sued
pur
suan
t to
the
exe
rcis
e of
the
ESO
S O
ptio
ns.
Any
pote
ntia
l effe
ct o
n th
e su
bsta
ntia
l sh
areh
olde
rs’ s
hare
hold
ing
in o
ur C
ompa
ny w
ill de
pend
on
the
num
ber o
f new
SEB
Sha
res
to b
e is
sued
aris
ing
from
the
exer
cise
of t
he E
SOS
Opt
ions
at t
he re
leva
nt p
oint
in ti
me.
For i
llust
rativ
e pu
rpos
es o
nly,
ass
umin
g al
l the
Ent
itled
Sha
reho
lder
s su
bscr
ibe
in fu
ll th
eir r
espe
ctiv
e en
title
men
ts u
nder
the
Prop
osed
Rig
hts
Issu
e, th
e pr
o fo
rma
effe
cts
of th
e Pr
opos
ed R
ight
s Is
sue
and
Prop
osed
ESO
S o
n th
e sh
areh
oldi
ngs
of th
e su
bsta
ntia
l sha
reho
lder
s of
our
C
ompa
ny b
ased
on
the
Reg
iste
r of S
ubst
antia
l Sha
reho
lder
s of
our
Com
pany
as
at th
e LP
D a
re a
s fo
llow
s:
Pro
form
a I
Pro
form
a II
As
at th
e LP
DA
fter t
he P
ropo
sed
Rig
hts
Issu
e of
Sha
res
with
War
rant
sA
fter P
ro fo
rma
I and
the
Prop
osed
Rig
hts
Issu
e of
RC
PS-i
Dire
ctIn
dire
ctD
irect
Indi
rect
Dire
ctIn
dire
ct
Nam
eN
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SE
B S
hare
s%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
STS
B95
3,00
4 15
.90
6,52
2 (1
) 0.1
1 2,
541,
345
15.9
0 17
,392
(1
) 0.1
1 2,
541,
345
15.9
0 17
,392
(1
) 0.1
1 S
apur
a H
oldi
ngs
Sdn
Bhd
(“
SHSB
”)-
-1,
007,
545
(2) 1
6.81
-
-2,
686,
786
(2) 1
6.81
-
-2,
686,
786
(2) 1
6.81
TSS
37,8
12
0.63
1,
007,
545
(3) 1
6.81
10
0,83
1 0.
63
2,68
6,78
6 (3
) 16.
81
100,
831
0.63
2,
686,
786
(3) 1
6.81
D
SS
506
0.01
1,
007,
545
(3) 1
6.81
1,
350
0.01
2,
686,
786
(3) 1
6.81
1,
350
0.01
2,
686,
786
(3) 1
6.81
B
roth
ers
Cap
ital S
dn B
hd-
-1,
007,
545
(3) 1
6.81
-
-2,
686,
786
(3) 1
6.81
-
-2,
686,
786
(3) 1
6.81
K
umpu
lan
Wan
gP
ersa
raan
(D
iper
bada
nkan
) (“
KW
AP”
)
411,
558
6.87
47
,585
(4
)0.
79
1,09
7,48
7 6.
87
126,
893
(4)0.
79
1,09
7,48
76.
87
126,
893
(4)0.
79
AR
T -A
SB
387,
000
6.46
-
-1,
032,
000
6.46
-
-1,
032,
000
6.46
-
-
31
32
Scen
ario
A
Pro
form
a III
Pro
form
a IV
Pro
form
a V
Afte
r Pro
form
a II
and
assu
min
g fu
ll ex
erci
se o
f the
ESO
S O
ptio
ns (5
)A
fter P
ro fo
rma
III a
nd a
ssum
ing
full
conv
ersi
on o
f the
RC
PS-i
Afte
r Pro
form
a IV
and
ass
umin
g fu
ll ex
erci
se o
f the
War
rant
sD
irect
Indi
rect
Dire
ctIn
dire
ctD
irect
Indi
rect
Nam
eN
o.of
SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SE
B S
hare
s%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
STS
B2,
541,
345
14.4
617
,392
(1
) 0.1
0 2,
922,
547
14.6
320
,001
(1
) 0.1
0 3,
081,
381
14.6
921
,088
(1
) 0.1
0 S
HS
B-
-2,
686,
786
(2) 1
5.29
--
3,08
9,80
4 (2
) 15.
47-
-3,
257,
728
(2) 1
5.53
TSS
899,
785
5.12
2,
686,
786
(3) 1
5.29
91
4,91
0 4.
58
3,08
9,80
4 (3
) 15.
4792
1,21
2 4.
39
3,25
7,72
8 (3
) 15.
53
DS
S1,
350
0.01
2,
686,
786
(3) 1
5.29
1,55
3 0.
01
3,08
9,80
4 (3
) 15.
471,
637
0.01
3,
257,
728
(3) 1
5.53
Bro
ther
s C
apita
l Sdn
Bhd
--
2,68
6,78
6 (3
) 15.
29-
-3,
089,
804
(3) 1
5.47
--
3,25
7,72
8 (3
) 15.
53KW
AP
1,09
7,48
7 6.
2412
6,89
3 (4
) 0.7
21,
262,
110
6.32
145,
926
(4) 0
.73
1,33
0,70
3 6.
3415
3,85
7 (4
) 0.7
3A
RT
-AS
B1,
032,
000
5.87
--
1,18
6,80
0 5.
94-
-1,
251,
300
5.97
--
Scen
ario
BPr
o fo
rma
IIIPr
o fo
rma
IVPr
o fo
rma
VA
fter P
ro fo
rma
II an
d as
sum
ing
full
conv
ersi
on o
f the
RC
PS-i
Afte
r Pro
form
a III
and
assu
min
g fu
ll ex
erci
se
of th
e W
arra
nts
Afte
r Pro
form
a IV
and
ass
umin
g fu
ll ex
erci
se o
f the
ESO
S O
ptio
ns (6
)
Dire
ctIn
dire
ctD
irect
Indi
rect
Dire
ctIn
dire
ct
Nam
eN
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SE
B S
hare
s%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
STS
B2,
922,
547
15.9
0 20
,001
(1
)0.
11
3,08
1,38
1 15
.90
21,0
88
(1)0.
11
3,08
1,38
1 14
.46
21,0
88
(1)0.
10
SH
SB
--
3,08
9,80
4 (2
) 16.
81
--
3,25
7,72
8 (2
)16
.81
--
3,25
7,72
8 (2
)15
.29
TSS
115,
956
0.63
3,
089,
804
(3) 1
6.81
12
2,25
8 0.
63
3,25
7,72
8 (3
)16
.81
1,09
0,99
0
5.12
3,25
7,72
8 (3
)15
.29
DS
S1,
553
0.01
3,
089,
804
(3) 1
6.81
1,
637
0.01
3,
257,
728
(3)16
.81
1,63
7 0.
01
3,25
7,72
8 (3
)15
.29
Bro
ther
s C
apita
l Sdn
Bhd
--
3,08
9,80
4 (3
) 16.
81
--
3,25
7,72
8 (3
)16
.81
--
3,25
7,72
8 (3
)15
.29
KWA
P1,
262,
110
6.87
14
5,92
6 (4
)0.
79
1,33
0,70
3 6.
87
153,
857
(4)
0.79
1,
330,
703
6.24
15
3,85
7 (4
)0.
72
AR
T -A
SB
1,18
6,80
0 6.
46
--
1,25
1,30
0 6.
46
--
1,25
1,30
0 5.
87
--
Not
es:
(1)
Dee
med
inte
rest
ed b
y vi
rtue
of it
s sh
areh
oldi
ng in
Jur
udat
a Sd
n B
hd p
ursu
ant t
o Se
ctio
n 8
of th
e Ac
t. (2
) D
eem
ed in
tere
sted
by
virtu
e of
bei
ng a
sub
stan
tial s
hare
hold
er o
f STS
B, S
apur
a R
esou
rces
Ber
had,
Sap
ura
Cap
ital S
dn B
hd, I
nder
a P
erm
ai S
dn B
hd a
nd
Juru
data
Sdn
Bhd
pur
suan
t to
Sec
tion
8 of
the
Act
. (3
) D
eem
ed in
tere
sted
by
virtu
e of
bei
ng a
sub
stan
tial s
hare
hold
er o
f SH
SB
pur
suan
t to
Sec
tion
8 of
the
Act.
(4)
Tota
l sha
reho
ldin
gs m
anag
ed b
y K
WA
P’s
fund
man
ager
s pu
rsua
nt to
Sec
tion
8 of
the
Act.
(5)
Ass
umin
g 79
9.0
mill
ion
ES
OS
Opt
ions
are
gra
nted
to a
nd e
xerc
ised
by
TSS,
repr
esen
ting
5% o
f the
tota
l num
ber o
f iss
ued
SE
B S
hare
s af
ter t
he P
ropo
sed
Rig
hts
Issu
e of
Sha
res
with
War
rant
s.
(6)
Ass
umin
g 96
8.7
mill
ion
ES
OS
Opt
ions
are
gra
nted
to a
nd e
xerc
ised
by
TSS,
repr
esen
ting
5% o
f the
tota
l num
ber o
f iss
ued
SE
B S
hare
s af
ter t
he P
ropo
sed
Rig
hts
Issu
e of
Sha
res
with
War
rant
s an
d as
sum
ing
full
conv
ersi
on o
f the
RC
PS
-i an
d fu
ll ex
erci
se o
f the
War
rant
s.
32
33
For i
llust
rativ
e pu
rpos
es o
nly,
ass
umin
g on
ly th
e U
nder
taki
ng S
hare
hold
ers
subs
crib
es th
eir r
espe
ctiv
e en
title
men
ts b
ased
on
the
Und
erta
king
s an
d on
ly A
SB
subs
crib
es fo
r the
Exc
ess
Rig
hts
Shar
es a
nd a
ll the
rem
aini
ng R
CPS
-i no
t tak
en u
p or
not
val
idly
take
n up
by
othe
r Ent
itled
Sha
reho
lder
s an
d/or
thei
r ren
ounc
ees
by w
ay o
f exc
ess
appl
icat
ion
in re
spec
t of t
he c
omm
itted
exc
ess
appl
icat
ion
purs
uant
to th
e PN
B U
nder
taki
ng a
nd th
e Fu
nds’
Und
erta
king
und
er th
e Pr
opos
ed
Rig
hts
Issu
e, th
e pr
o fo
rma
effe
cts
of th
ePr
opos
ed R
ight
s Is
sue
and
Prop
osed
ESO
S on
the
shar
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ding
s of
the
subs
tant
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hare
hold
ers
of o
ur C
ompa
ny
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the
Reg
iste
r of S
ubst
antia
l Sha
reho
lder
s of
our
Com
pany
as
at th
e LP
Dar
e as
follo
ws:
Pro
form
a I
Pro
form
a II
As
at th
e LP
DA
fter t
he P
ropo
sed
Rig
hts
Issu
e of
Sha
res
with
War
rant
sA
fter P
ro fo
rma
I and
the
Prop
osed
Rig
hts
Issu
e of
RC
PS-i
Dire
ctIn
dire
ctD
irect
Indi
rect
Dire
ctIn
dire
ct
Nam
eN
o. o
f SEB
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ares
%N
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f SEB
Sh
ares
%N
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Sh
ares
%N
o. o
f SE
B S
hare
s%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
STS
B95
3,00
4 15
.90
6,52
2 (1
) 0.1
1 1,
953,
004
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2 6,
522
(1) 0
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1,95
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6,52
2 (1
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SH
SB
--
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5 (2
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81
--
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56
--
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TSS
37,8
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24
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SS
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50
60.
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roth
ers
Cap
ital S
dn B
hd-
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-
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AP
411,
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47
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79
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558
2.58
47
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30
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558
2.58
47
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0 A
RT
-AS
B38
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46
--
5,48
2,05
3 34
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--
5,48
2,05
3 34
.31
--
Scen
ario
A
Pro
form
a III
Pro
form
a IV
Pro
form
a V
Afte
r Pro
form
a II
and
assu
min
g fu
ll ex
erci
se o
f the
ESO
S O
ptio
ns (5
)A
fter P
ro fo
rma
III a
nd a
ssum
ing
full
conv
ersi
on o
f the
RC
PS-i
Afte
r Pro
form
a IV
and
ass
umin
g fu
ll ex
erci
se o
f the
War
rant
sD
irect
Indi
rect
Dire
ctIn
dire
ctD
irect
Indi
rect
Nam
eN
o.of
SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SEB
Sh
ares
%N
o. o
f SE
B S
hare
s%
No.
of S
EB
Shar
es%
No.
of S
EB
Shar
es%
(‘000
)(‘0
00)
(‘000
)(‘0
00)
(‘000
)(‘0
00)
STS
B1,
953,
004
11.1
1 6,
522
(1) 0
.04
1,95
3,00
4 9.
78
6,52
2 (1
) 0.0
3 2,
053,
004
9.79
6,
522
(1) 0
.03
SH
SB
--
2,00
7,54
5 (2
) 11.
42
--
2,00
7,54
5 (2
) 10.
05
--
2,10
7,54
5 (2
) 10.
05
TSS
836,
766
4.
76
2,00
7,54
5 (3
) 11.
42
836,
766
4.
19
2,00
7,54
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) 10.
05
836,
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05
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60.
00
2,00
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) 11.
42
506
0.00
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545
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50
60.
00
2,10
7,54
5 (3
) 10.
05
Bro
ther
s C
apita
l Sdn
Bhd
--
2,00
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) 11.
42
--
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--
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P41
1,55
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85
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27
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558
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)0.
24
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558
1.96
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,585
(4
) 0.2
3 A
RT
-AS
B5,
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053
31.1
9 -
-7,
742,
553
38.7
6 -
-8,
252,
058
39.3
5 -
-
33
34
35
36
The Proposed ESOS is not expected to have an immediate effect on the NA per SEB Share and gearing of our Group until such time when the ESOS Options are exercised. The effects on the NA per SEB Share and gearing of our Group will depend on, among others, the Options Exercise Price, and the number of new SEB Shares to be issued arising from the exercise of the ESOS Options.
For illustration purposes only, upon exercise of the ESOS Options, the NA per SEB Share is expected to:
(i) increase if the Options Exercise Price is higher than the NA per SEB Share; or
(ii) decrease if the Options Exercise Price is lower than the NA per SEB Share,
at such point of exercise.
11.4 Earnings and EPS
The Proposed Rights Issue is not expected to have any material effect on the earnings of our Group for the FYE 31 January 2019 as it is expected to be completed in the first quarter of 2019. Our Group registered a loss for the FYE 31 January 2018 largely due to impairment for its drilling business. Assuming the loss remains unchanged, upon completion of the Proposed Rights Issue of Shares with Warrants, the loss per SEB Share will reduce proportionately as a result of the increase in the weighted average number of SEB Shares in issue. The loss per SEB Share will reduce further as a result of the increase in the number of SEB Shares arising from the conversion of the RCPS-i on the RCPS-i Maturity Date and the exercise of the Warrants during the Exercise Period, if any.
For illustrative purposes only, based on the audited consolidated statement of comprehensive income of our Company as at 31 January 2018 and on the assumption that the Proposed Rights Issue had been completed on 1 February 2017, being the beginning of the FYE 31 January 2018, the proforma effects of the Proposed Rights Issue on our Company’s consolidated earnings and EPS are as follows:
(RM‘000)
Loss attributable to owner of our Company for the FYE 31 January 2018
(2,503,473)
Less: Accelerated amortisation of transaction cost arising from the repayment of borrowings pursuant to (1):
- the Proposed Rights Issue of Shares with Warrants (46,400)- the Proposed Rights Issue of RCPS-i (15,326)
Add: Annual estimated savings in finance cost upon repayment of borrowings (1)
174,150
Adjusted loss attributable to owner of our Company for the FYE 31 January 2018 after the Proposed Rights Issue
(2,391,049)
Number of SEB Shares in issue for the FYE 31 January 2018 (‘000) (2)
5,992,155
Adjusted number of SEB Shares in issue after the Proposed Rights Issue (‘000)
(3) 15,979,080
Loss per SEB Share for the FYE 31 January 2018 (sen) (4) (41.78)Adjusted loss per SEB Share after the Proposed Rights Issue (sen) (5) (14.96)
36
37
38
39
40
41
42
43
1
PART B
IAL FROM MERCURY SECURITIES TO THE NON-INTERESTED SHAREHOLDERS OFSEB IN RELATION TO THE PROPOSED EXEMPTION
44
EXECUTIVE SUMMARY
2
All definitions used in this Executive Summary shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
This Executive Summary summarises this IAL. You are advised to read and understand this IAL in its entirety, together with the letter from the Board to the shareholders of SEB in relation to the Proposals and Proposed Grant in Part A of the Circular and the accompanying appendices for other relevant information and not to rely solely on this Executive Summary in forming an opinion on the Proposed Exemption.
You are also advised to carefully consider the recommendations contained in both the letters before voting on the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.
If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
Please refer to Section 4, Part A of the Circular and Section 1 of this IAL for further details of the Proposed Exemption.
On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independencefrom any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.
The SC had on 5 November 2018 notified that it has no further comments to the contents of this IAL. However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the Independent Adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this IAL.
The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights issue will not be implemented.
The purpose of this IAL is to provide the non-interested shareholders of SEB with an independent evaluation on the Proposed Exemption on a holistic basis together with our recommendation on whether the non-interested shareholders of SEB should vote in favour of or against the Proposed Exemption.
Please refer to Section 1 of this IAL for further details.
EXECUTIVE SUMMARY
2
All definitions used in this Executive Summary shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
This Executive Summary summarises this IAL. You are advised to read and understand this IAL in its entirety, together with the letter from the Board to the shareholders of SEB in relation to the Proposals and Proposed Grant in Part A of the Circular and the accompanying appendices for other relevant information and not to rely solely on this Executive Summary in forming an opinion on the Proposed Exemption.
You are also advised to carefully consider the recommendations contained in both the letters before voting on the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.
If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
Please refer to Section 4, Part A of the Circular and Section 1 of this IAL for further details of the Proposed Exemption.
On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independencefrom any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.
The SC had on 5 November 2018 notified that it has no further comments to the contents of this IAL. However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the Independent Adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this IAL.
The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights issue will not be implemented.
The purpose of this IAL is to provide the non-interested shareholders of SEB with an independent evaluation on the Proposed Exemption on a holistic basis together with our recommendation on whether the non-interested shareholders of SEB should vote in favour of or against the Proposed Exemption.
Please refer to Section 1 of this IAL for further details.
45
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
46
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
EXECUTIVE SUMMARY (cont’d)
4
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
47
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
5
(vi) 99.5% of the total gross proceeds to be raised from the recapitalisation exercise will be used for the repayment of bank borrowings, which will benefit the Group in terms of stronger financial position, finance cost savings and reduced exposure to interest rate fluctuations.
Proposed Exemption
In view of the funding requirements of the SEB Group as well as the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed and accordingly, the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL will not materialise.
Proposed Amendments
The Proposed Amendments entail amendments to the relevant clauses of the Constitution to facilitate the Proposed Rights Issue in respect of the issuance of the RCPS-i and serving of notices by electronic form.
(II) Rights Issue Price, Implied Conversion Price and Exercise Price
We are of the view that the basis and justification for the Rights Issue Price, Implied Conversion Price and Exercise Price are justifiable after taking into consideration the following factors:-
(i) the subscription by the Undertaking Shareholders of the Excess Rights Shares and excess RCPS-i via excess application will be on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the Undertaking Shareholders do not gain any advantage or additional entitlement over the non-interested shareholders of SEB;
(ii) the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue, there will not be any Excess Rights Share or excess RCPS-i to be subscribed by the Undertaking Shareholders;
(iii) the Rights Issue Price of RM0.30 represents discounts ranging between 3.2% to 28.6% to the TERP of SEB Shares up to and including the LPD as well as a discount of 81.0% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58 and accordingly, should encourage the subscription of Rights Shares by the Entitled Shareholders;
(iv) although the Implied Conversion Price of RM0.41 is equivalent to the TERP of RM0.41 based on the 5-day VWAMP of the SEB Shares up to and including the Announcement LTD of RM0.59, it represents a discount of 74.1% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58. In addition, the following features of the RCPS-i should encourage the subscription of RCPS-i by the Entitled Shareholders:-
(a) the RCPS-i shall carry the right to receive preferential dividends at the expected preferential dividend rate of 5% per annum on a semi-annual basis (subject to the availability of distributable profits);
(b) the RCPS-i will be listed and quoted on the Main Market of Bursa Securities, thus providing an avenue for RCPS-i holders who wish to monetise their investment in RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years;
48
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
6
(c) the RCPS-i are redeemable, whether wholly or in part, by SEB on a pro-rata basis at any time during the next 5 years from the issuance date at a redemption price which shall be the aggregate of:-
(i) the RCPS-i Issue Price;
(ii) any preferential dividends declared but unpaid as at the redemption date;
(iii) any Deferred Dividends as at the redemption date; and
(iv) a redemption adjustment that yields an effective return of 10% per annum, computed based on the internal rate of returnformula, from the issue date up to the redemption date of the RCPS-i, out of the distributable profits of SEB and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date;
(v) any remaining RCPS-i which are not redeemed by the end of its 5-year tenure will be automatically converted into new SEB Shares at the conversion ratio of 1 new SEB Share for 1 RCPS-i held; and
(vi) the issuance of free Warrants provides an added incentive for the Entitled Shareholders and/or their renouncee(s) to subscribe for the Rights Shares. Although the Exercise Price of RM0.49 represents a premium ranging between 16.7% to 58.1% to the TERP of SEB Shares up to and including the LPD, the Exercise Price is at a discount of 69.0% to the audited consolidated NA per SEB Shares as at 31 January 2018 of RM1.58. Furthermore, as at the LPD, the Warrants (which shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed) have a theoretical value of RM0.14 and this shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.
(III) Effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
On a standalone basis, the Proposed Exemption and Proposed Amendments will not have any effect on the issued share capital, substantial shareholders’ shareholdings, NA per SEB Share, gearing and EPS of the SEB Group. Nonetheless, the Proposed Exemption and Proposed Amendments are necessary to facilitate the implementation of the Proposed Rights Issue.
The pro forma effects of the Proposed Rights Issue (see Section 11, Part A of the Circular as well as Section 5.3 of this IAL for further details) are as follows:-
(i) upon completion of the Proposed Rights Issue, the issued share capital of SEB will increase significantly from RM8.07 billion as at the LPD to RM11.91 billion.After full conversion of the RCPS-i and assuming full exercise of the Warrants into new SEB Shares, the issued share capital of SEB will increase further to RM12.51 billion;
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49
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
EXECUTIVE SUMMARY (cont’d)
7
(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other
members of the PNB Group43.56 49.39
Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.
50
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
8
Scenario 2
All assumptions are same as Scenario 1 except for item (iii) above.
In Scenario 2, the respective members of the PNB Group subscribes for:-
(i) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue, but the shareholding of each member of the PNB Group does not exceed 33% of the enlarged issued share capital of SEB; and
(ii) all the excess RCPS-i.
In this scenario, none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group and the other substantial shareholders in SEB will be the same as shown in Scenario 1.
The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of ASB, the PNB Group and the substantial shareholders in SEB upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.
(iii) the NA of the Group will increase from RM9.45 billion as at 31 January 2018 (RM1.58 per SEB Share) to RM13.35 billion (RM0.84 per SEB Share) upon completion of the Proposed Rights Issue and thereafter, to RM13.83 billion after full conversion of the RCPS-i and assuming full exercise of the Warrants (further diluted to RM0.71 per SEB Share);
(iv) the gearing ratio of the Group will reduce from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the Proposed Rights Issue and thereafter, to 0.87 times after full conversion of the RCPS-i and assuming full exercise of the Warrants.
The reduction in gearing of the Group above is due to part repayment of bank borrowings amounting to RM3.96 billion as well as the enlarged NA base of the Group. Subsequent additional repayment of the Group’s borrowings using proceeds from the exercise of the Warrants in the future will further reduce the Group’s gearing to 0.87 times.
(v) the Proposed Rights Issue is expected to contribute positively to the earnings of the Group as the proceeds raised will be utilised towards reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly (finance cost savings of RM174 million per annum).
As a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any), there will be dilution in the EPS of the Group upon issuance of such new SEB Shares.
Notwithstanding the dilution in NA per SEB Share and EPS of the Group as set out above, it is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of the Entitled Shareholders on the Entitlement Date. Accordingly, should all the Entitled Shareholders subscribe in full for their respective entitlements under the Proposed Rights Issue, there will not be any dilution to the percentage of shareholdings held by all the Entitled Shareholders and ultimately, their share of NA and earnings of the SEB Group.
51
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
9
Based on our evaluation above, we are of the view that the overall effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are expected to be positive to the Group.
(IV) Industry outlook and future prospects of the SEB Group
According to the Short-term Energy Outlook by the U.S. Energy Information Administration (“EIA”), Brent crude oil prices is forecasted to average USD73 per barrel in 2018 and USD74 per barrel in 2019. In addition, the EIA forecasted Brent crude oil prices to remain relatively stable between USD72 per barrel and USD76 per barrel from September 2018 to the end of 2019. As oil prices continue to stabilise around the new USD70 to USD80 per barrel level, upstream players are expected to be more confident in expanding their investments in exploration, development and production activities. In turn, this is expected to lead to higher demand for O&G services and solutions.
With a larger capital / NA base coupled with the available debt headroom upon completion of the recapitalisation exercise, the SEB Group shall be well-positioned to ride on the continued recovery of the O&G industry.
In view of the above and after taking into consideration the past experience and track record of the SEB Group in the O&G services and solutions segment, we are of the view that the future prospects of the SEB Group appear to be positive.
(V) Implications arising from the voting outcome of the Proposed Exemption
If you vote in favour of the Proposed Exemption, the SC would be able to consider the application by the PNB Group for the Proposed Exemption.
Should you vote against the Proposed Exemption, SEB will not be able to undertake the recapitalisation exercise in view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular. Accordingly, the part repayment of bank borrowings will also not materialise. Consequently, SEB will not be able to realise the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL. Save for the Proposed Rights Issue, SEB does not have any alternative equity fund raising exercise being contemplated at this juncture.
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52
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
10
3. CONCLUSION AND RECOMMENDATION
We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider both the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.
The Proposed Exemption (if granted) will allow SEB to undertake the Proposed Rights Issue (if it is also approved by the shareholders of SEB). Accordingly, the potential advantages and disadvantages of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are as follows:-
Potential advantages
(i) The support from PNB via the PNB Undertaking and the Funds’ Undertaking demonstrates its interest and commitment in SEB. Further, such support provides certainty to SEB in raising the Intended Gross Proceeds.
(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borrowings and for working capital requirements.
Accordingly, the Proposed Rights Issue serves to strengthen the Group’s balance sheet by reducing its bank borrowings and increasing its equity base, thus improving its gearing position. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to capitalise on emerging opportunities in the O&G industry following the current uptrend in oil prices. Accordingly, this is expected to contribute positively towards higher revenue and future earnings to the SEB Group.
The part repayment of bank borrowings will benefit the Group in terms of:-
(a) increasing its NA base from RM9.45 billion as at 31 January 2018 to RM13.35 billion upon completion of the exercise and thereafter, to RM13.83 billion upon full conversion of the RCPS-i and full exercise of the Warrants;
(b) lowering the gearing ratio of the Group from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the exercise and thereafter, to 0.87 times upon full conversion of the RCPS-i and full exercise of the Warrants;
(c) reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly; and
(d) reducing exposure to interest rate fluctuations in view that the Group’s bank borrowings largely carry a floating interest rate.
(iii) The Proposed Rights Issue provides an opportunity for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of:-
(a) Rights Shares (with free Warrants on the basis of 1 Warrant for every 10 Rights Shares subscribed) at the Rights Issue Price of RM0.30; and
(b) RCPS-i (which shall be automatically converted into SEB Shares at the end of its 5-year tenure) at the RCPS-i Issue Price of RM0.41,
without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
(iv) The features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i. Moreover,while the RCPS-i shall be automatically converted into SEB Shares at the end of its 5-year tenure, Entitled Shareholders also have the option to monetise their RCPS-i via disposal in the open market.
EXECUTIVE SUMMARY (cont’d)
10
3. CONCLUSION AND RECOMMENDATION
We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider both the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.
The Proposed Exemption (if granted) will allow SEB to undertake the Proposed Rights Issue (if it is also approved by the shareholders of SEB). Accordingly, the potential advantages and disadvantages of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are as follows:-
Potential advantages
(i) The support from PNB via the PNB Undertaking and the Funds’ Undertaking demonstrates its interest and commitment in SEB. Further, such support provides certainty to SEB in raising the Intended Gross Proceeds.
(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borrowings and for working capital requirements.
Accordingly, the Proposed Rights Issue serves to strengthen the Group’s balance sheet by reducing its bank borrowings and increasing its equity base, thus improving its gearing position. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to capitalise on emerging opportunities in the O&G industry following the current uptrend in oil prices. Accordingly, this is expected to contribute positively towards higher revenue and future earnings to the SEB Group.
The part repayment of bank borrowings will benefit the Group in terms of:-
(a) increasing its NA base from RM9.45 billion as at 31 January 2018 to RM13.35 billion upon completion of the exercise and thereafter, to RM13.83 billion upon full conversion of the RCPS-i and full exercise of the Warrants;
(b) lowering the gearing ratio of the Group from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the exercise and thereafter, to 0.87 times upon full conversion of the RCPS-i and full exercise of the Warrants;
(c) reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly; and
(d) reducing exposure to interest rate fluctuations in view that the Group’s bank borrowings largely carry a floating interest rate.
(iii) The Proposed Rights Issue provides an opportunity for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of:-
(a) Rights Shares (with free Warrants on the basis of 1 Warrant for every 10 Rights Shares subscribed) at the Rights Issue Price of RM0.30; and
(b) RCPS-i (which shall be automatically converted into SEB Shares at the end of its 5-year tenure) at the RCPS-i Issue Price of RM0.41,
without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
(iv) The features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i. Moreover,while the RCPS-i shall be automatically converted into SEB Shares at the end of its 5-year tenure, Entitled Shareholders also have the option to monetise their RCPS-i via disposal in the open market.
53
EXECUTIVE SUMMARY (cont’d)
3
2. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-
(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
Proposed Rights Issue
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.
As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.
EXECUTIVE SUMMARY (cont’d)
11
Potential advantages
(v) Through the exercise of the Warrants (if they are in-the-money), the Entitled Shareholders will be able to further increase their equity participation in SEB while also providing additional funds to the Group for working capital and/or repayment of borrowings. Alternatively, Entitled Shareholders have the option to monetise their Warrants via disposal in the open market.
Potential disadvantages
(i) The NA per SEB Share will be diluted from RM1.58 (as at 31 January 2018) to RM0.84 (upon completion of the Proposed Rights Issue) and thereafter, diluted further to RM0.71 (after full conversion of the RCPS-i and assuming the full exercise of the Warrants) as the new SEB Shares will be issued at prices lower than the NA per SEB Share whereby against the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58:-
(a) the Rights Issue Price for the Rights Shares of RM0.30 represents a discount of 81.0%;
(b) the Implied Conversion Price for the Conversion Shares of RM0.41 represents a discount of 74.1%; and
(c) the Exercise Price for the Exercised Shares of RM0.49 represents a discount of 69.0%.
The EPS of the Group will be diluted as a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any).
(ii) Subject to the Exemption Shareholding Limit as set out in Section 5.5.1 of this IAL, the Proposed Exemption will allow the increase in:-
(a) the shareholding of ASB in SEB from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares; and
(b) the collective shareholdings of the PNB Group in SEB from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares and on the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%,
without being required to undertake the Mandatory Offer.
Accordingly, ASB and the PNB Group may obtain control (i.e. shareholding of more than 33%) over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). Further, with a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
(iii) The Warrants shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed. Accordingly, the renunciation of the Rights Shares by any Entitled Shareholders will entail the renunciation of the attached Warrants. Accordingly, they will forgo their option to either:-
(a) exercise the Warrants to increase their equity participation in SEB; or
(b) monetise the Warrants via disposal in the open market. As at the LPD, the Warrants have a theoretical value derived based on the Trinomial option pricing model of RM0.14, which shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.
(iv) Pursuant to the Proposed Rights Issue, the weighted average cost of capital of SEB will increase from 5.14% to 5.32% arising from the increase in equity financing which has a higher required rate of return as compared to debt financing.
Premised on the above where the potential advantages outweigh the potential disadvantages, as well as our evaluation of the Proposed Exemption on a holistic basis, we are of the opinion that, on the basis of the information available to us, the Proposed Exemption is fair and reasonable.
Accordingly, we recommend that you vote in favour of the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.
54
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Registered office: Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
17 October 2016
To: The Holders
Dear Sir / Madam,
UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE
1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.
The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.
WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.
IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are as follows:-
Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.
You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.
Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.
6
Aluminium.indd 6 10/14/2016 8:49:07 PM
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
12
Registered Office:Ground, 1st, 2nd, 3rd Floor
Wisma Umno Lorong Bagan Luar Dua
12000 Butterworth Seberang Perai
7 November 2018
To: The non-interested shareholders of Sapura Energy Berhad
Dear Sir / Madam,
SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)
INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION
This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.
1. INTRODUCTION
On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.
Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.
Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.
The Proposed Exemption is being sought by the PNB Group pursuant to:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
55
13
(ii) where ASB individually and/or the PNB Group collectively holds more than 33% butless than 50% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group by more than 2% of the enlarged issued share capital of SEB in any period of 6 months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL).
On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independence from any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.
The pro forma effects on the percentage shareholdings held by the PNB Group in SEB pursuant to the Proposed Rights Issue are set out in Section 5.3.2 of this IAL.
In the event that none of the other Entitled Shareholders subscribe for their respective entitlements under the Proposed Rights Issue apart from the subscription by the Undertaking Shareholders in the following manner:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are as follows:-
Percentage of shareholdings in SEBASB(%)
PNB Group(%)
As at the LPD 6.46 12.16
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other members of the PNB
Group43.56 49.39
56
14
In another scenario whereby the respective members of the PNB Group subscribes for:-
(i) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue, but the shareholding of each member of the PNB Group does not exceed 33% of the enlarged issued share capital of SEB; and
(ii) all the excess RCPS-i,
none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group will be the same as shown in the table above.
The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of ASB and the PNB Group upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.
The SC had on 5 November 2018 notified that it has no further comments to the contents of this IAL. However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the Independent Adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this IAL.
The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights Issue will not be implemented.
The purpose of this IAL is to provide the non-interested shareholders of SEB with an independent evaluation on the Proposed Exemption on a holistic basis together with our recommendation on whether the non-interested shareholders of SEB should vote in favour of or against the Proposed Exemption.
Nonetheless, the non-interested shareholders of SEB should rely on their own evaluation of the merits of the Proposed Exemption before making a decision on the course of action to be taken at the forthcoming EGM.
This IAL is prepared solely for the use of the non-interested shareholders of SEB to consider the Proposed Exemption and should not be used or relied upon by any other party for any other purposes whatsoever.
YOU ARE ADVISED TO READ AND UNDERSTAND BOTH THIS IAL AND THE LETTER FROM THE BOARD TO THE SHAREHOLDERS OF SEB IN RELATION TO THE PROPOSALS AND PROPOSED GRANT AS SET OUT IN PART A OF THE CIRCULAR TOGETHER WITH THE ACCOMPANYING APPENDICES, AND TO CAREFULLY CONSIDER THE RECOMMENDATIONS CONTAINED IN BOTH THE LETTERS BEFORE VOTING ON THE ORDINARY RESOLUTION IN RESPECT OF THE PROPOSED EXEMPTION TO BE TABLED AT THE FORTHCOMING EGM.
IF YOU ARE IN DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
57
15
2. SCOPE AND LIMITATIONS OF OUR EVALUATION OF THE PROPOSED EXEMPTION
Mercury Securities was not involved in any formulation of or any deliberations and negotiations on the terms and conditions pertaining to the Proposals. The terms of reference of our appointment as the Independent Adviser for the Proposed Exemption are in accordance with the requirements in Paragraph 4.08 of the Rules.
Our terms of reference as the Independent Adviser are limited to expressing an independent opinion on the Proposed Exemption as to whether the Proposed Exemption is fair and reasonable insofar as the non-interested shareholders of SEB are concerned as well as providing our recommendation based on information and document made available to us as set out below:-
(i) information contained in Part A of the Circular and the accompanying appendices;
(ii) other relevant information, document, confirmation and representation furnished to us by the Board, management and/or representatives of SEB; and
(iii) other publicly available information which we deem to be relevant, including but not limited to annual reports and audited consolidated financial statements of SEB.
We have relied on the SEB Group as well as their Directors, management and/or representatives to take due care in ensuring that all information, document, confirmation and representation provided to us to facilitate our evaluation and which had been used, referred to and/or relied upon in this IAL have been fully disclosed to us, are accurate, valid and complete in all material aspects.
After making all reasonable enquiries, we are satisfied that sufficient information has been disclosed to us in enabling us to formulate our opinion and recommendation and the information is reasonable, accurate, complete and free from material omission.
In rendering our advice, we have taken note of the pertinent matters, which we believe are necessary and of importance to an assessment of the implications of the Proposed Exemption and therefore are of general concern to the non-interested shareholders of SEB to consider and form their views thereon. Notwithstanding the foregoing, we have not given consideration to the specific investment objectives, risk profiles, financial situations and particular needs of any individual non-interested shareholder or any specific group of non-interested shareholders. We recommend that any individual non-interested shareholder or group of non-interested shareholders who is / are in doubt as to the action to be taken or require advice in relation to the Proposed Rights Issue, Proposed Exemption and Proposed Amendments in the context of their investment objectives, risk profiles, financial situations and particular needs to consult their respective stockbrokers, bank managers, solicitors, accountants or other professional advisers immediately.
Our views expressed in this IAL are, amongst others, based on economic, market and other conditions prevailing, and the information and/or document made available to us as at the LPD or such other period as specified herein. Such conditions may change significantly over a short period of time. In addition, it should be noted that our evaluation and opinion expressed in this IAL do not take into account information, events or conditions arising after the LPD or such other period as specified herein, as the case may be.
58
16
We shall immediately notify the SC in writing and the non-interested shareholders by way of an announcement to Bursa Securities and a press notice if after despatching this IAL, as guided by Paragraph 11.07(1) of the Rules, we become aware that this IAL:-
(i) contains a material statement which is false or misleading;
(ii) contains a statement from which there is a material omission; or
(iii) does not contain a statement relating to a material development.
If circumstances require, we shall send a supplementary IAL to the non-interested shareholders in accordance with Paragraph 11.07(2) of the Rules.
3. DETAILS OF THE PROPOSED RIGHTS ISSUE, PROPOSED EXEMPTION AND PROPOSED AMENDMENTS
The details of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are set out in the following sections in Part A of the Circular and should be read in entirety by the non-interested shareholders of SEB:-
Section in Part A of the Circular
Proposed Rights Issue of Shares with Warrants 2 Proposed Rights Issue of RCPS-i 3 Proposed Exemption 4 Proposed Amendments 6
4. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM
The interests of the Directors, major shareholders and/or persons connected with them (together with their course of actions in relation to the Proposals) are set out in Section 13, Part A of the Circular.
5. EVALUATION OF THE PROPOSED EXEMPTION
In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.
In our evaluation of the Proposed Exemption, we have considered the following factors:-
Consideration factors Section in the IAL(i) Rationale for the Proposed Rights Issue, Proposed Exemption and
Proposed Amendments5.1
(ii) Rights Issue Price, Implied Conversion Price and Exercise Price 5.2(iii) Effects of the Proposed Rights Issue, Proposed Exemption and Proposed
Amendments5.3
(iv) Industry outlook and future prospects of the SEB Group 5.4(v) Implications arising from the voting outcome of the Proposed Exemption 5.5
59
17
5.1 Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
We have considered the rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments set out in Section 8, Part A of the Circular and our commentaries are summarised below:-
5.1.1 Proposed Rights Issue
We view the rationale for the recapitalisation exercise to be reasonable based on the following analysis:-
(a) as part of its business strategies and future plans, the Group’s asset base has grown significantly since the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012. As a result, the Group has undertaken a substantial amount of borrowings in order to fund its capital expenditure and working capital requirements, thus contributing to a high borrowing level;
(b) the low oil price environment that occurred since mid-2014 which impacted the entire O&G industry had resulted in fewer projects tendered and lower revenue for the Group which has affected the Group’s ability to pare down its existing large borrowings;
(c) amid the current gradual recovery in oil prices, it is essential for the Group to strengthen its balance sheet to enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to take advantage of emerging opportunities;
(d) utilisation of the Intended Gross Proceeds; and
(e) the Proposed Rights Issue is the most appropriate means to raise funds.
Further details of the abovesaid points are elaborated below.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
60
18
(A) As part of its business strategies and future plans, the Group’s asset base has grown significantly since the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012. As a result, the Group has undertaken a substantial amount of borrowings in order to fund its capital expenditure and working capital requirements, thus contributing to a high borrowing level
SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”), creating an integrated services provider covering the oil and gas (“O&G”) value chain with full-fledged engineering, procurement, construction, installation and commissioning (EPCIC) capabilities andhaving presence in Malaysia and various regions including Asia, Australia, Middle East, Europe, Americas and Africa. The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry as illustrated below:-
Business segments Description
Engineering and Construction (“E&C”)
Front-end engineering design (Feed), detailed design engineering (DDE), procurement, construction (fabrication), offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, diving, survey and subsea inspection, repair and maintenance (IRM) services, flexible and rigid pipelay, installation of subsea umbilicals, riser and flowlines, decommissioning of offshore structure and manufacturing and operation of remotely operated vehicles (ROV)
Drilling Services Provision of tender-assisted drilling services for the purposes of development drilling, production drilling, well completion, workovers as well as plug and abandonment for operators
Exploration and Production (“E&P”)
Exploration, development and production of crude oil and natural gas
The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.
Post the Merger in 2012, SEB emerged as one of the world’s largest integrated O&G service and solution provider with a market capitalisation of RM25.3 billion. Through the Merger, SEB managed to leverage on both SapuraCrest Petroleum Berhad’s andKencana Petroleum Berhad’s expertise and capabilities to bid and secure larger and more complex projects. As a result, the Group’s revenue increased by 170% from RM2.56 billion in the FYE 31 January 2012 to RM6.91 billion in the FYE 31 January 2013. This was also achieved during the peak of the O&G industry when oil prices were trading above USD100 per barrel.
In line with the business strategies and future plans of SEB as set out in its prospectus dated 16 May 2012, SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. Among the assets acquired by the Group since the Merger include:-
(a) acquisition of the tender rig business through the acquisition of Seadrill Tender Rig Limited (“Seadrill”) for USD2.6 billion, which was completed in 2013 and resulted in an increase in the number of SEB’s operating tender rigs from 3 to 21 as at FYE 31 January 2014; and
61
19
(b) acquisition of the E&P business through the acquisition of Newfield Malaysia Holdings Inc. (“Newfield”) for USD896 million which was completed in 2014.
With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. In 2013, SEB undertook a private placement exercise whereby the proceeds were utilised to part finance the Group’s acquisition of Seadrill, a company involved in the tender rig business. The combination of the tender rig business between SEB and Seadrill allowed SEB’s Drilling Services business to strengthen its business profile as a result of enhancement of scale as well as increased exposure to higher margin offshore drilling.
Apart from the acquisition of Seadrill which was financed via a combination of debt and equity, the Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. In 2014, SEB completed the acquisition of Newfield, the Malaysian operations of Newfield Exploration Company, a leading regional independent E&P company. Newfield was later renamed as Sapura Exploration and Production (Malaysia) Inc. which provides full exploration, development and production capabilities as well as participating interests in several production-sharing contracts and an alliance arrangement. Following the acquisition, SEB emerged as the first Malaysian independent O&G producer. The acquisition was funded via external bank borrowings.
In light of the Group’s continuous efforts to grow its asset base (including the expansion of the Group’s fleet of vessels and rigs) in order to take advantage of the O&G industry’s booming period, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015. While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.
Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank
Negara Malaysia at 12.00 p.m. as at 30 January 2018.
(B) The low oil price environment that occurred since mid-2014 which impacted the entire O&G industry had resulted in fewer projects tendered and lower revenue for the Group which has affected the Group’s ability to pare down its existing large borrowings
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price).
During this period, SEB tendered fewer projects as oil majors and national oil companies were delaying or cutting back on exploration, development and production activities. As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss (its first loss after tax since the Merger in 2012) in FYE 31 January 2016 of RM791.4 million as compared to a profit after tax of RM1.4 billion in the preceding financial year. This was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.
62
20
In v
iew
of t
he a
bove
, sin
ce th
em
erge
r, th
e G
roup
’s g
earin
g ha
s in
crea
sed
from
0.8
8 tim
es a
s at
31
Janu
ary
2013
to 1
.74
times
as
at 3
1 Ja
nuar
y 20
18 a
s illu
stra
ted
belo
w:-
Aud
ited
as a
t 31
Janu
ary
2013
(RM
’mill
ion)
2014
(RM
’mill
ion)
2015
(RM
’mill
ion)
2016
(RM
’mill
ion)
2017
(RM
’mill
ion)
2018
(RM
’mill
ion)
(I)Lo
ng-te
rm b
orro
win
gs-
Hire
pur
chas
e an
d fin
ance
leas
e lia
bilit
ies
3.9
23.0
19.1
13
.6
6.6
0.3
-Te
rm lo
ans
(Sec
ured
)3,
002.
410
,603
.310
.5
--
--
Term
loan
s (U
nsec
ured
)-
-9,
029.
5 9,
561.
5 8,
473.
9 6,
820.
7 -
Isla
mic
faci
lity
--
6,79
5.6
5,66
2.6
5,60
0.3
3,40
3.5
-Is
tina’
Bon
ds a
nd M
urab
ahah
Com
mer
cial
Pap
er /
Mur
abah
ah
Med
ium
Ter
m N
otes
129.
5-
--
--
-S
ukuk
pro
gram
me
669.
970
0.0
-1,
000.
3 1,
055.
1 4,
468.
5 3,
805.
711
,326
.315
,854
.716
,238
.015
,135
.914
,693
.0
(II)
Sho
rt-te
rm b
orro
win
gs-
Hire
pur
chas
e an
d fin
ance
leas
e lia
bilit
ies
2.0
7.7
8.2
9.7
8.7
6.1
-R
evol
ving
cre
dits
(Sec
ured
)46
1.9
655.
3-
--
--
Rev
olvi
ng c
redi
ts (U
nsec
ured
)55
4.1
292.
763
9.7
1,15
0.1
1,18
3.7
1,71
4.7
-Te
rm lo
ans
(Sec
ured
)1,
020.
178
.76.
0 -
--
-Te
rm lo
ans
(Uns
ecur
ed)
--
431.
8 91
6.9
1,84
5.1
1.4
-B
anke
rs a
ccep
tanc
e0.
3-
--
--
-Is
lam
ic F
acilit
y-
--
-46
8.1
--
Istin
a’ B
onds
and
Mur
abah
ah C
omm
erci
al P
aper
/ M
urab
ahah
M
ediu
m T
erm
Not
es59
.8-
--
--
-B
ank
over
draf
ts37
.1-
12.9
14.5
5.
3 -
2,13
5.3
1,03
4.4
1,09
8.6
2,09
1.2
3,51
0.9
1,72
2.2
Tota
l int
eres
t-bea
ring
borr
owin
gs(D
) = (I
) + (I
I)5,
941.
012
,360
.716
,953
.318
,329
.218
,646
.816
,415
.2
(E)
Tota
l equ
ity6,
742.
910
,201
.111
,993
.012
,213
.013
,080
.39,
450.
4
Gea
ring
ratio
(tim
es) (
D)/(
E)0.
881.
211.
411.
501.
431.
74
63
21
The
incr
ease
in th
e ge
arin
g le
vel o
f the
Gro
up w
as m
ainl
y du
e to
:- (i)
re
lianc
e on
add
ition
al b
orro
win
gs to
mee
t the
Gro
up’s
cap
ital e
xpen
ditu
re (w
hich
exp
ande
d si
gnifi
cant
ly d
urin
g th
e 20
12-2
014
perio
d w
hen
the
O&
G
indu
stry
was
at i
ts p
eak)
and
wor
king
cap
ital r
equi
rem
ents
;
(ii)
cont
inue
d re
finan
cing
of t
he G
roup
’s e
xist
ing
borro
win
gs (a
mid
the
wea
ker o
utlo
ok o
f the
O&
G in
dust
ry fo
llow
ing
tum
blin
g oi
l pric
es s
ince
mid
-201
4,
the
Gro
up la
unch
ed a
30-
year
Mul
ti-C
urre
ncy
Suk
uk P
rogr
amm
e of
up
to R
M7.
0 bi
llion
and
obt
aine
d a
6-ye
ar U
SD
2.1
billi
on M
urab
ahah
Mul
ti-C
urre
ncy
Term
Fac
ility
mai
nly
to re
finan
ce th
e G
roup
’s b
orro
win
gs);
and
(ii
i) lo
wer
tota
l equ
ity d
ue to
loss
es in
curre
d by
the
Gro
up a
mid
dec
linin
g co
ntra
ct re
venu
es a
nd p
rofit
mar
gins
as
wel
l as
prov
isio
ns fo
r im
pairm
ent d
ue to
w
eak
dem
and
for t
he G
roup
’s a
sset
s an
d se
rvic
es.
As
for t
he in
tere
st c
over
ratio
(as
com
pute
d in
the
tabl
e be
low
), th
e G
roup
reco
rded
neg
ativ
e in
tere
st c
over
ratio
for t
he F
YE 3
1 Ja
nuar
y 20
18, m
ainl
y at
tribu
tabl
e to
:- (i)
lo
sses
incu
rred
by th
e G
roup
; and
(ii)
high
fina
nce
cost
s.
FYE
31 J
anua
ry
Audi
ted
2013
(R
M’m
illio
n)
2014
(R
M’m
illio
n)
2015
(R
M’m
illio
n)
2016
(R
M’m
illio
n)
2017
(R
M’m
illio
n)
2018
(R
M’m
illio
n)
(A
) (L
oss)
/ Pr
ofit
befo
re in
tere
st e
xpen
se a
nd ta
x 1
,057
.2
1,6
51.6
2
,282
.5
47.
5
1,1
85.1
(1
,464
.9)
In
tere
st e
xpen
ses
- Ba
nk b
orro
win
gs
227
.4
458
.6
677
.6
761
.1
779
.8
833
.6
- Ac
cret
ion
of a
sset
retir
emen
t obl
igat
ions
-
-
2
8.8
2
7.6
3
2.8
3
0.0
227
.4
458
.6
706
.4
788
.7
812
.6
863
.6
Le
ss: I
nter
est e
xpen
ses
capi
talis
ed
- Pr
oper
ty, p
lant
and
equ
ipm
ent
-
(14.
7)
(39.
8)
(28.
6)
(12.
7)
(5.0
) (B
) N
et in
tere
st e
xpen
ses
227
.4
443
.9
666
.6
760
.1
799
.9
858
.6
In
tere
st c
over
ratio
(tim
es) (
A)/(B
) 4.
65
3.72
3.
42
0.06
1.
48
(1.7
1)
The
wea
ker f
inan
cial
per
form
ance
of t
he G
roup
in re
cent
yea
rs h
as a
ffect
ed th
e G
roup
’s a
bilit
y to
par
e do
wn
its e
xist
ing
larg
e bo
rrow
ings
goi
ng fo
rwar
d.
64
22
(C) Amid the current gradual recovery in oil prices, it is essential for the Group to strengthen its balance sheet to enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to take advantage of emerging opportunities
Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).This is mainly due to amongst others, decreasing oil inventories, robust global demand and growing geopolitical tensions. However, most of the O&G service providers in Malaysia are still tied down by high borrowings and finance costs, which limit their abilities to bid for contracts.
In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including astrategic partnership for its E&P business and possibly its Drilling Services business.
In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position. At the same time, this strategic partnership provides certainty on the Group’s monetisation plan, which helps to address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.
The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.
(D) Utilisation of the Intended Gross Proceeds
As set out in Section 7, Part A of the Circular, the Company expects to raise the Intended Gross Proceeds of RM3.98 billion from its recapitalisation exercise, which is intended to be used in the following manner:-
Description of use of proceeds
Estimated timeframe from date of listing of the Rights Shares and/or issuance of the RCPS-i
Amount
RM’million %
Part repayment of the bank borrowings of the SEB Group
Within 4 months 3,958.0 99.5
Defray estimated expenses relating to the Proposals
Within 1 months 20.8 0.5
Total gross proceeds 3,978.8 100.0
65
23
(i)
Part
repa
ymen
t of b
ank
borr
owin
gs
In li
ne w
ith S
EB’
s re
capi
talis
atio
n ex
erci
se, t
he g
ross
pro
ceed
s to
be
rais
ed (
99.5
%)
will
be u
sed
to r
epay
the
Gro
up’s
ban
k bo
rrow
ings
. As
at 3
1 Ju
ly
2018
, the
Gro
up’s
tota
l ban
k bo
rrow
ings
are
app
roxi
mat
ely
RM
16.9
bill
ion,
the
deta
ils o
f whi
ch a
re a
s fo
llow
s:-
Type
of b
orro
win
gsSe
curit
y pl
edge
dFu
lly re
paya
ble
by
Wei
ghte
d av
erag
e ef
fect
ive
inte
rest
rate
s pe
r ann
um(%
)
Am
ount
repa
yabl
eA
mou
nt
outs
tand
ing
as a
t 31
July
201
8(R
M’m
illio
n)
With
in 1
year
(RM
’mill
ion)
1-2
yea
rs(R
M’m
illio
n)2
-5 y
ears
(RM
’mill
ion)
Mor
e th
an 5
ye
ars
(RM
’mill
ion)
Hire
pur
chas
e an
d fin
ance
le
ase
liabi
litie
s (R
M /
US
D)
Ass
ets
purc
hase
d-
-5
--
-5
Uns
ecur
ed te
rm lo
an(U
SD
)-
Ran
ging
from
Fe
brua
ry 2
021
to
Mar
ch 2
024
4.53
–4.
694,
001
143
1,31
01,
666
7,12
0
Isla
mic
faci
lity
(RM
/ U
SD
)-
Dec
embe
r 202
14.
42 –
5.80
-56
12,
912
-3,
473
Suk
uk p
rogr
amm
e(R
M /
US
D)
-R
angi
ng fr
om
Janu
ary
2021
to
Mar
ch 2
024
4.58
–6.
70-
-1,
717
2,80
84,
525
Rev
olvi
ng c
redi
ts
(Uns
ecur
ed)
(RM
/ U
SD
)
--
3.34
–4.
591,
750
--
-1,
750
Tota
l ban
k bo
rrow
ings
16,8
73
66
24
The benefits to the Group arising from the part repayment of bank borrowings are as follows:-
(1) Strengthened financial position
The recapitalisation exercise is expected to strengthen the Group’s financial position. As set out in Section 11.3, Part A of the Circular, upon completion of the Proposed Rights Issue:-
(a) the pro forma NA of the Group will increase from RM9.45 billion as at 31 January 2018 to RM13.35 billion; and
(b) the gearing ratio of the Group will reduce from 1.74 times as at 31 January 2018 to 0.94 times.
After full conversion of the RCPS-i and assuming full exercise of the Warrants in the future, the pro forma NA and gearing ratio of the Group will improve further to RM13.83 billion and 0.87 times respectively.
A larger NA base will enhance competitiveness of the Group to ride on the potential recovery of activities in the O&G industry. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids (see our commentaries on the industry outlook and future prospects of the SEB Group in Section 5.4 of this IAL).
(2) Finance cost savings
The part repayment of bank borrowings will result in a reduction in finance costs. For illustration purpose, based on an interest rate of 4.4% per annum, the repayment of RM3.96 billion bank borrowings will result in finance cost savings (before taxation) of RM174 million per annum. Accordingly, the interest cover ratio of SEB will also improve.
(3) Reduced exposure to interest rate fluctuations
The Group’s bank borrowings largely carry a floating interest rate i.e. an interest rate which will vary or fluctuate over time based on an underlying benchmark interest rate which may translate to an increase in interest expenses to be incurred by the Group.
Currently, the Group actively reviews its debt portfolio, taking into account its investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a lower interest rate environment and achieve a certain level of protection against rate hikes.
The part repayment of bank borrowings will reduce the Group’s exposure to fluctuations in interest rate.
(ii) Estimated expenses relating to the Proposals
The estimated expenses relating to the Proposals comprise the following:-
Estimated expensesAmount
(RM’million)Professional fees 3.0Underwriting commission 15.8Fees payable to relevant authorities 0.5Printing and despatch and other incidental expenses 1.5Total 20.8
67
25
(E) The Proposed Rights Issue is the most appropriate means to raise funds
The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-
(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD)and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;
(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;
(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;
(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;
(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and
(vi) 99.5% of the total gross proceeds to be raised from the recapitalisation exercise will be used for the repayment of bank borrowings, which will benefit the Group in terms of stronger financial position, finance cost savings and reduced exposure to interest rate fluctuations (see above for further details).
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
68
26
Pursuant to the Proposed Rights Issue, the weighted average cost of capital (“WACC”) of SEB will increase from 5.14% to 5.32% (see below), arising from the increase in equity financing which has a higher required rate of return (approximately 8.95% after the repayment of RM3.96 billion bank borrowings) as compared to debt financing (4.80%). Notwithstanding the increase in WACC, the implementation of the recapitalisation exercise will strengthen the Group’s capital structure and may improve the credit rating (and hence lower its average cost of borrowings, currently at 4.80%)and debt capacity of the Group.
Before Proposed Rights
IssueAfter Proposed
Rights Issue
WACC 5.14% 5.32%
where:-
WACC = E x Ke + D x Kd (1 – t)D + E D + E
and:-
E: market value of the firm’s equity before* / after# the recapitalisation exercise.
* Before - based on the 5-day VWAMP of SEB Shares up to and including the LPD of RM0.3282 and the existing issued share capital of SEB comprising 5,992,155,087 SEB Shares
# After - based on the TERP of RM0.3235 computed based on the 5-day VWAMP of SEB Shares up to and including the LPD of RM0.3282 and the enlarged issued share capital of SEB comprising 18,375,942,267 SEB Shares after the recapitalisation exercise (assuming full conversion of RCPS-i into new SEB Shares)
D: market value of the firm’s debt, which is based on the Group’s interest-bearing borrowings as at 31 July 2018 of RM16.87 billion (to reduce by RM3.96 billion to RM12.91 billion after the recapitalisation exercise).
Ke: cost of equity (17.90% before the recapitalisation exercise; 8.95% after the recapitalisation exercise), representing the rate of return required by an investor on the cash flow streams generated by the Group given, amongst others, the risks associated with the cash flows and is derived using Capital Asset Pricing Model below:-
Ke = Rf + β (Rm – Rf)
where:-
Rf: risk-free rate of return, representing the expected rate of return from a risk-free investment and is derived based on the yield of 10-year Malaysian Government Securities as at the LPD of 4.08%.
β: beta, representing the sensitivity of an asset’s returns to the changes in market returns. It measures the correlation of systematic risk between the said asset and the market. A beta of more than 1 signifies that the asset is riskier than the market and vice versa, as extracted from Bloomberg, the adjusted 3-year weekly beta of the Company up to and including the LPD is 2.210. We have adopted the beta of the Company as SEB has been listed on Bursa Securities since 17 May 2012 and hence, its beta is obtainable and represents a reliable measure for the riskiness of the SEB Shares. Further, there is no company listed on Bursa Securities which is comparable to the SEB Group in view that SEB is a large integrated services provider operating across the O&G value chain.
For the purpose of computing the cost of equity of SEB after the recapitalisation exercise, we have un-levered the adjusted beta and re-levered it based on the capital structure of SEB after the part repayment of bank borrowings.
69
27
Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.
Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.
t: corporate tax rate, which is based on the latest statutory tax rate of 24%.
5.1.2 Shareholder’s undertaking and underwriting arrangement
Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.
Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.
The abovementioned undertakings and underwriting agreement are subject to the following:-
(i) the approval of the SC for the Proposed Exemption;
(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and
(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.
As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
5.1.3 Proposed Exemption
As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
27
Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.
Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.
t: corporate tax rate, which is based on the latest statutory tax rate of 24%.
5.1.2 Shareholder’s undertaking and underwriting arrangement
Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.
Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.
The abovementioned undertakings and underwriting agreement are subject to the following:-
(i) the approval of the SC for the Proposed Exemption;
(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and
(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.
As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
5.1.3 Proposed Exemption
As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
27
Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.
Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.
t: corporate tax rate, which is based on the latest statutory tax rate of 24%.
5.1.2 Shareholder’s undertaking and underwriting arrangement
Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.
Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.
The abovementioned undertakings and underwriting agreement are subject to the following:-
(i) the approval of the SC for the Proposed Exemption;
(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and
(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.
As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
5.1.3 Proposed Exemption
As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
27
Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.
Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.
t: corporate tax rate, which is based on the latest statutory tax rate of 24%.
5.1.2 Shareholder’s undertaking and underwriting arrangement
Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.
Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.
The abovementioned undertakings and underwriting agreement are subject to the following:-
(i) the approval of the SC for the Proposed Exemption;
(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and
(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.
As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
5.1.3 Proposed Exemption
As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
27
Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.
Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.
t: corporate tax rate, which is based on the latest statutory tax rate of 24%.
5.1.2 Shareholder’s undertaking and underwriting arrangement
Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.
Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.
The abovementioned undertakings and underwriting agreement are subject to the following:-
(i) the approval of the SC for the Proposed Exemption;
(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and
(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.
As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.
5.1.3 Proposed Exemption
As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-
(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;
(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and
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(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-iMaturity Date,
which may result in:-
(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares,exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or
(ii) where ASB individually and/or the PNB Group collectively holds more than 33% but less than 50% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group by more than 2% of the enlarged issued share capital of SEB in any period of 6 months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL).
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
As it is not the intention of the PNB Group to undertake the Mandatory Offer, the Proposed Exemption will relieve them from the obligation to undertake such Mandatory Offer pursuant to Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules.
In view of the above and the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed and accordingly, the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL will not materialise.
It is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue, there will not be any Excess Rights Shares or RCPS-i to be subscribed by the PNB Group.
Furthermore, pursuant to the PNB Undertaking and the Funds’ Undertaking, the PNB Group has an obligation to subscribe in full its entitlements under the Proposed Rights Issue and to apply for all the remaining Excess Rights Shares and RCPS-i via excess application on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the PNB Group does not gain any advantage or additional entitlement over the non-interested shareholders of SEB.
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On the other hand, as set out in Sections 2.1 and 3.1, Part A of the Circular, the Rights Shares and RCPS-i which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of the Board to allocate the excess Rights Shares with Warrants and RCPS-i, if any, in a fair and equitable manner on a basis to be determined by the Board.
Further, the Proposed Rights Issue of RCPS-i will enable the Company to raise the requisite funds without the Company being over-capitalised after taking into consideration the new SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants, given the Company’s right (without obligation) to redeem the RCPS-i (whether wholly or in part on a pro rata basis)which will allow the Company to manage its share base.
We have also considered the salient terms of the RCPS-i (as set out in Appendix II) and we noted that these terms are similar to the Rights Shares except for certain rights held by the RCPS-i holders. Please refer to our commentaries in Section 5.2 of this IAL.
5.1.4 Proposed Amendments
The Proposed Amendments entail amendments to the relevant clauses of the Constitution to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of the RCPS-i and serving of notices by electronic form.
Based on the above, we are of the view that there are merits in the Proposed Rights Issue, Proposed Exemption and Proposed Amendments.
5.2 Rights Issue Price, Implied Conversion Price and Exercise Price
5.2.1 Evaluation of the Rights Issue Price and the Implied Conversion Price
The basis and justification for the Rights Issue Price and the Implied Conversion Price are set out in Sections 2.2.1 and 3.2.2, Part A of the Circular respectively. The Rights Issue Price and the Implied Conversion Price were determined after taking into consideration amongst others:-
(i) the prevailing market price of the SEB Shares up to the Announcement LPD; and
(ii) the TERP of SEB Shares of RM0.41 based on the 5-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.
The Rights Issue Price of RM0.30 represents a discount of approximately 26.8% to the abovementioned TERP of SEB Shares of RM0.41. The Implied Conversion Price for the RCPS-i of RM0.41 is equivalent to the TERP of SEB Shares of RM0.41.
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In evaluating the Rights Issue Price and the Implied Conversion Price, we have considered the following:-
(i) Historical closing market prices
The graph below sets out the historical closing market prices of SEB Shares for the past 12 months up to the LPD:-
(Source: Bloomberg)
Note:- (1) The principal activities of the SEB Group have remained unchanged
for the past 12 months up to the LPD.
Based on the graph above, we noted that the historical closing market prices of SEB Shares have generally been on a downward trend while the trading volume of SEB Shares has increased significantly since early December 2017.
Save for the announcements in relation to the Proposals and unaudited quarterly financial results as well as events as disclosed below, there is no significant event being announced for the past 12 months up to the LPD which may have impacted the market prices and trading volume of the SEB Shares during the said period:-
Date of announcement Announcement
15.11.2017 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.47 billion.
25.1.2018 Announcement that SEB has engaged advisors to evaluate and advise on the potential listing of the E&P business
5.2.2018 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM905 million.
21.3.2018 Announcement that Sapura Fabrication Sdn Bhd (a wholly-owned subsidiary of SEB) has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project.
Rights Issue PriceImplied Conversion Price
Volume RM
30
In evaluating the Rights Issue Price and the Implied Conversion Price, we have considered the following:-
(i) Historical closing market prices
The graph below sets out the historical closing market prices of SEB Shares for the past 12 months up to the LPD:-
(Source: Bloomberg)
Note:- (1) The principal activities of the SEB Group have remained unchanged
for the past 12 months up to the LPD.
Based on the graph above, we noted that the historical closing market prices of SEB Shares have generally been on a downward trend while the trading volume of SEB Shares has increased significantly since early December 2017.
Save for the announcements in relation to the Proposals and unaudited quarterly financial results as well as events as disclosed below, there is no significant event being announced for the past 12 months up to the LPD which may have impacted the market prices and trading volume of the SEB Shares during the said period:-
Date of announcement Announcement
15.11.2017 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.47 billion.
25.1.2018 Announcement that SEB has engaged advisors to evaluate and advise on the potential listing of the E&P business
5.2.2018 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM905 million.
21.3.2018 Announcement that Sapura Fabrication Sdn Bhd (a wholly-owned subsidiary of SEB) has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project.
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Date of announcement Announcement
22.3.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) has commenced production at the B15 gas field which is located within the SK310 Production Sharing Contract area, offshore Sarawak, East Malaysia.
26.3.2018 Announcement that Sapura Exploration and Production (NZ) Sdn Bhd (formerly known as Sapura Exploration and Production (JV) Sdn Bhd) (a wholly-owned subsidiary of SEB) has made inroads into New Zealand with a series of farm-in agreements to five offshore exploration permits within the Taranaki Basin, a prolific oil and gas region.
29.3.2018 Announcement that Sapura Exploration and Production Sdn Bhd (a wholly-owned subsidiary of SEB) together with its joint venture partners, DEA Deutsche Erdoel Mexico and Premier Oil Plc, have been awarded Block 30 in Sureste Basin, a proven and prolific hydrocarbon province in the Gulf of Mexico.
11.4.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) and its partners, PETRONAS Carigali Sdn Bhd and Sarawak Shell Berhad, have taken final investment decision to develop the Gorek, Larak and Bakong fields as phase 1 in the SK408 Production Sharing Contract.
11.6.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) andits partners, Sarawak Shell Berhad and PETRONAS Carigali Sdn Bhd, have made its ninth gas discovery offshore Sarawak, following the completion of its 2017 drilling campaign within the SK408 Production Sharing Contract.
21.6.2018 Announcement that SEB’s wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.8 billion.
4.9.2018 Announcement that Sapura Upstream Sdn Bhd(formerly known as Sapura Exploration and Production Sdn Bhd) (a wholly-owned subsidiary of SEB) had made its first foray into Australia via the farm-in to 3 offshore exploration permits (located within the highly prolific North West Shelf oil and gas province off Western Australia), held by Finder Exploration Pty Ltd, a private oil and gas company based in West Perth, Australia.
12.9.2018 Announcement that SEB had entered into a Heads of Agreement for the proposed sale of 50% stake in its wholly-owned subsidiary, Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd) to OMV Aktiengesellschaft.
24.9.2018 Announcement that SEB’s wholly-owned subsidiaries have been awarded contracts/subcontract/contract extension with a combined value of approximately RM815 million.
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The highest and lowest closing market prices and the closing price at the end of each month of the SEB Shares for the period commencing from February 2018 (being 6 months before the announcement of the Proposals on 24 August 2018) to the LPD are as follows:-
Month
Closing market price
HighestRM
LowestRM
At the end of month
RM
2018February 0.74 0.67 0.67March 0.65 0.41 0.55April 0.79 0.50 0.64May 0.85 0.55 0.55June 0.67 0.58 0.64July 0.62 0.59 0.61August 0.60 0.34 0.34September 0.46 0.34 0.41October 0.43 0.32 0.34
Closing market price from February 2018 until the LPD- Highest (on 14 May 2018) 0.85- Lowest (on 30 October 2018) 0.32
(Source: Bloomberg)
(ii) Discount over closing market prices and VWAMPs
The Rights Issue Price of RM0.30 represents a discount to the following closing market prices and VWAMPs of SEB Shares:-
Closing market price
/ VWAMP TERP(1) DiscountRM RM RM %
Up to the LPD:-Closing market price 0.34 0.32 (0.02) (6.3)5-day VWAMP 0.33 0.31 (0.01) (3.2)1-month VWAMP 0.37 0.33 (0.03) (9.1)3-month VWAMP 0.42 0.34 (0.04) (11.8)6-month VWAMP 0.55 0.39 (0.09) (23.1)1-year VWAMP 0.63 0.42 (0.12) (28.6)
Up to the Announcement LTD:-Closing market price 0.60 0.41 (0.11) (26.8)5-day VWAMP 0.59 0.41 (0.11) (26.8)
(Source: Bloomberg)
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The Implied Conversion Price of RM0.41 represents a premium / discount to the following closing market prices and VWAMPs of SEB Shares:-
Closing market price
/ VWAMP TERP(1)Premium / discount
RM RM RM %
Up to the LPD:-Closing market price 0.34 0.32 0.09 28.15-day VWAMP 0.33 0.31 0.10 32.31-month VWAMP 0.37 0.33 0.08 24.23-month VWAMP 0.42 0.34 0.07 20.66-month VWAMP 0.55 0.39 0.02 5.11-year VWAMP 0.63 0.42 (0.01) (2.4)
Up to the Announcement LTD:-Closing market price 0.60 0.41 - -5-day VWAMP 0.59 0.41 - -
(Source: Bloomberg)
Note:- (1) Computed after taking into account the Proposed Rights Issue of
Shares with Warrants as follows:-
where:-
Warrants are in-the-money
TERP = (A x X) + (B x Y) + (C x Z)A + B + C
A = Number of existing SEB Shares B = Number of Rights Shares C = Number of Warrants X = Respective closing market price / VWAMPs of SEB Shares in
the table above Y = Rights Issue Price Z = Exercise Price
Warrants are out-of-money or at-the-money
TERP = (A x X) + (B x Y)A + B
A = Number of existing SEB Shares B = Number of Rights Shares X = Respective closing market price / VWAMPs of SEB Shares in
the table above Y = Rights Issue Price
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(iii) Consolidated NA per SEB Share
The Rights Issue Price of RM0.30 represents a discount to the following consolidated NA per SEB Share:-
Consolidated NA per SEB Share
RM
Discount
RM %
(i) Unaudited consolidated NA per SEB Share as at 31 July 2018
1.58 (1.28) (81.0)
(ii) Audited consolidated NA per SEB Share as at 31 January 2018
1.58 (1.28) (81.0)
(Sources: Unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 as well as audited consolidated financial statements of SEB for the FYE 31 January 2018)
The Implied Conversion Price of RM0.41 represents a discount to the following consolidated NA per SEB Share:-
Consolidated NA per SEB Share
RM
Discount
RM %
(i) Unaudited consolidated NA per SEB Share as at 31 July 2018
1.58 (1.17) (74.1)
(ii) Audited consolidated NA per SEB Share as at 31 January 2018
1.58 (1.17) (74.1)
(Sources: Unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 as well as audited consolidated financial statements of SEB for the FYE 31 January 2018)
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5.2.2 Evaluation of the Exercise Price
The Exercise Price of the Warrants was arrived at based on the TERP of SEB Shares of RM0.41 computed based on the 5-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.
In evaluating the Exercise Price, we have considered the following:-
(i) Theoretical value of the Warrants
In evaluating the Exercise Price of the Warrants, we have considered the theoretical value of the Warrants by adopting the Trinomial option pricing model(1) with the following parameters:-
(a) value of the underlying SEB Shares of RM0.31, being the TERP of SEB Shares based on the 5-day VWAMP of the SEB Shares up to and including the LPD of RM0.33;
(b) Exercise Price of the Warrants of RM0.49;
(c) tenure of the Warrants of 7 years;
(d) risk-free rate of 4.08% based on the yield of 10-year Malaysian Government Securities as at the LPD; and
(e) historical volatility of the SEB Shares since listing up to and including the LPD of 48.75% (as extracted from Bloomberg).
Note:- (1) The Trinomial option pricing model is a simulation-based model
utilising a probability tree which incorporates 3 possible values that an underlying asset can have, stretched over an extended period of time.
The theoretical value or fair value of the Warrants is the sum of the:-
(i) intrinsic value (being the difference between the value of the underlying SEB Shares and the Exercise Price of the Warrants); and
(ii) time value (which is the value attributed to the Warrants taking into consideration factors such as, amongst others, the tenure of the Warrants, the expected risk-free rate over the tenure of the Warrants and the volatility of the SEB Shares).
Based on the foregoing, the theoretical value of the Warrants is set out below:-
RMTheoretical value of the Warrants(a) Intrinsic value -(b) Time value 0.1351
0.1351
Please note that the abovementioned theoretical value may not correspond to the actual market prices of the Warrants upon listing on the Main Market of Bursa Securities. There can also be no assurance that an active market for the Warrants will develop, or if developed, that such market can be sustained.
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(ii) Premium / (Discount) over closing market prices and VWAMPs
The Exercise Price of RM0.49 represents a premium to the following TERPs of SEB Shares computed based on the following closing market prices and VWAMPs of SEB Shares:-
TERP(1) PremiumRM RM %
Up to the LPD:-Closing market price 0.32 0.17 53.15-day VWAMP 0.31 0.18 58.11-month VWAMP 0.33 0.16 48.53-month VWAMP 0.34 0.15 44.16-month VWAMP 0.39 0.10 25.61-year VWAMP 0.42 0.07 16.7
Up to the Announcement LTD:-Closing market price 0.41 0.08 19.55-day VWAMP 0.41 0.08 19.5
(Source: Bloomberg)
Note:- (1) As computed in Section 5.2.1 of this IAL.
(iii) Consolidated NA per SEB Share
The Exercise Price of RM0.49 represents a discount to the following consolidated NA per SEB Share:-
Consolidated NA per SEB Share
RM
Discount
RM %
(i) Unaudited consolidated NA per SEB Share as at 31 July 2018
1.58 (1.09) (69.0)
(ii) Audited consolidated NA per SEB Share as at 31 January 2018
1.58 (1.09) (69.0)
(Sources: Unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 as well as audited consolidated financial statements of SEB for the FYE 31 January 2018)
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Our commentaries:-
Based on our evaluation above, we are of the view that the basis and justification for the Rights Issue Price, Implied Conversion Price and Exercise Price are justifiable after taking into consideration the following factors:-
(i) the subscription by the Undertaking Shareholders of the Excess Rights Shares and excess RCPS-i via excess application will be on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the Undertaking Shareholders do not gain any advantage or additional entitlement over the non-interested shareholders of SEB;
(ii) the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue,there will not be any Excess Rights Share or excess RCPS-i to be subscribed by the Undertaking Shareholders;
(iii) the Rights Issue Price of RM0.30 represents discounts ranging between 3.2% to 28.6% to the TERP of SEB Shares up to and including the LPD as well as a discount of 81.0% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58 and accordingly, should encourage the subscription of Rights Shares by the Entitled Shareholders;
(iv) although the Implied Conversion Price of RM0.41 is equivalent to the TERP of RM0.41 based on the 5-day VWAMP of the SEB Shares up to and including the Announcement LTD of RM0.59, it represents a discount of 74.1% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58. In addition, the following features of the RCPS-i should encourage the subscription of RCPS-i by the Entitled Shareholders:-
(a) the RCPS-i shall carry the right to receive preferential dividends at the expected preferential dividend rate of 5% per annum on a semi-annual basis (subject to the availability of distributable profits);
(b) the RCPS-i will be listed and quoted on the Main Market of Bursa Securities, thus providing an avenue for RCPS-i holders who wish to monetise their investment in RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years;
(c) the RCPS-i are redeemable, whether wholly or in part, by SEB on a pro-rata basis at any time during the next 5 years from the issuance date at a redemption price which shall be the aggregate of:-
(i) the RCPS-i Issue Price;
(ii) any preferential dividends declared but unpaid as at the redemption date;
(iii) any Deferred Dividends as at the redemption date; and
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(iv) a redemption adjustment that yields an effective return of 10% per annum, computed based on the internal rate of return formula, from the issue date up to the redemption date of the RCPS-i, out of the distributable profits of SEB and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date;
(v) any remaining RCPS-i which are not redeemed by the end of its 5-year tenure will be automatically converted into new SEB Shares at the conversion ratio of 1 new SEB Share for 1 RCPS-i held; and
(vi) furthermore, the issuance of free Warrants provides an added incentive for the Entitled Shareholders and/or their renouncee(s) to subscribe for the Rights Shares. Although the Exercise Price of RM0.49 represents a premium ranging between 16.7% to 58.1% to the TERP of SEB Shares up to and including the LPD, the Exercise Price is at a discount of 69.0% to the audited consolidated NA per SEB Shares as at 31 January 2018 of RM1.58. Furthermore, as at the LPD, the Warrants (which shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed) have a theoretical value of RM0.14 and this shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.
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5.3 Effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments
We noted the effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments from Section 11, Part A of the Circular.
On a standalone basis, the Proposed Exemption and Proposed Amendments will not have any effect on the share capital, substantial shareholders’ shareholdings, NA per SEB Share, gearing and EPS of the SEB Group. Nonetheless, the Proposed Exemption and Proposed Amendments are necessary to facilitate the implementation of the Proposed Rights Issue.
The pro forma effects of the Proposed Rights Issue are summarised as follows:-
5.3.1 Issued share capital
The increase in issued share capital of SEB upon completion of the Proposed Rights Issue is as follows:-
Issued share capitalSEB Shares
(RM’000)RCPS-i
(RM’000)Total
(RM’000)
As at the LPD 8,066,410 - 8,066,410
and after the following events(in sequential order):-(i) Proposed Rights Issue of Shares
with Warrants10,923,981 - 10,923,981
(ii) Proposed Rights Issue of RCPS-i 10,923,981 982,713 11,906,694(iii) Full conversion of the RCPS-i 11,906,694 - 11,906,694(iv) Full exercise of the Warrants 12,513,718 - 12,513,718
5.3.2 Substantial shareholders’ shareholdings
The pro forma effects of the Proposed Rights Issue on the substantial shareholders’ shareholdings are set out in Section 11.2, Part A of the Circular.
Set out below are the percentage of shareholdings of the PNB Group and the substantial shareholders in SEB as at the LPD:-
Name
As at the LPDNo. of SEB Shares
(‘000) %
PNB 19,641 0.33
PNB FundsASB 387,000 6.46Amanah Saham Malaysia 2 - Wawasan 83,000 1.39Amanah Saham Malaysia 93,154 1.55Amanah Saham Malaysia 3 65,456 1.09Amanah Saham Bumiputera 3 - Didik 37,554 0.63Amanah Saham Bumiputera 2 9,000 0.15Amanah Saham Nasional 7,741 0.13ASN Equity 2 3,674 0.06ASN Imbang (Mixed Asset Balanced) 1 7,390 0.12ASN Equity 3 9,533 0.16ASN Imbang (Mixed Asset Balanced) 2 4,762 0.08ASN Sara (Mixed Asset Conservative) 1 - -ASN Equity 5 - -ASN Sara (Mixed Asset Conservative) 2 - -Bumiputera Wealth Fund 500 0.01
Total - PNB Group 728,405 12.16
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Name
As at the LPDNo. of SEB Shares
(‘000) %
Other substantial shareholders (with more than 5% direct interest in SEB)STSB 953,004 15.90KWAP 411,558 6.87
The pro forma effects on the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-
Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue
As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.
Assuming none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below
Scenario 1
Assuming that:-
(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;
(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;
(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-
(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and
(b) all the excess RCPS-i;
(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and
(v) full exercise of the Warrants by the PNB Group,
the maximum potential percentage shareholdings of ASB and the PNB Group in SEB and the corresponding effect on the shareholdings of other substantial shareholders in SEB pursuant to the Proposed Rights Issue are as follows:-
Name
Pro forma I Pro forma IIAfter the Proposed Rights
Issue of Shares with Warrants
After Pro forma I and the Proposed Rights Issue of
RCPS-iNo. of SEB Shares
(‘000) %No. of SEB Shares
(‘000) %
PNB 52,376 0.33 52,376 0.33
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Name
Pro forma I Pro forma IIAfter the Proposed Rights
Issue of Shares with Warrants
After Pro forma I and the Proposed Rights Issue of
RCPS-iNo. of SEB Shares
(‘000) %No. of SEB Shares
(‘000) %
PNB FundsASB 5,482,053 34.31 5,482,053 34.31Amanah Saham Malaysia 2 - Wawasan 221,333 1.39 221,333 1.39Amanah Saham Malaysia 248,410 1.55 248,410 1.55Amanah Saham Malaysia 3 174,550 1.09 174,550 1.09Amanah Saham Bumiputera 3 - Didik 100,145 0.63 100,145 0.63Amanah Saham Bumiputera 2 24,000 0.15 24,000 0.15Amanah Saham Nasional 20,643 0.13 20,643 0.13ASN Equity 2 9,798 0.06 9,798 0.06ASN Imbang (Mixed Asset Balanced) 1 19,706 0.12 19,706 0.12ASN Equity 3 25,421 0.16 25,421 0.16ASN Imbang (Mixed Asset Balanced) 2 12,699 0.08 12,699 0.08ASN Sara (Mixed Asset Conservative) 1 - - - -ASN Equity 5 - - - -ASN Sara (Mixed Asset Conservative) 2 - - - -Bumiputera Wealth Fund 500 * 500 *
Total - PNB Group 6,391,632 40.00 6,391,632 40.00
Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 12.22 1,953,004 12.22KWAP 411,558 2.58 411,558 2.58
Name
Pro forma III Pro forma IVAfter Pro forma II and
assuming full conversion of the RCPS-i
After Pro forma III and assuming full exercise of the Warrants by ASB only
No. of SEB Shares(‘000) %
No. of SEB Shares(‘000) %
PNB 60,232 0.33 60,232 0.32
PNB FundsASB 7,742,553 42.13 8,252,058 43.70Amanah Saham Malaysia 2 - Wawasan 254,533 1.39 254,533 1.35Amanah Saham Malaysia 285,671 1.55 285,671 1.51Amanah Saham Malaysia 3 200,733 1.09 200,733 1.06Amanah Saham Bumiputera 3 - Didik 115,166 0.63 115,166 0.61Amanah Saham Bumiputera 2 27,600 0.15 27,600 0.15Amanah Saham Nasional 23,739 0.13 23,739 0.13ASN Equity 2 11,267 0.06 11,267 0.06ASN Imbang (Mixed Asset Balanced) 1 22,662 0.12 22,662 0.12ASN Equity 3 29,234 0.16 29,234 0.15ASN Imbang (Mixed Asset Balanced) 2 14,604 0.08 14,604 0.08ASN Sara (Mixed Asset Conservative) 1 - - - -ASN Equity 5 - - - -ASN Sara (Mixed Asset Conservative) 2 - - - -Bumiputera Wealth Fund 500 * 500 *
Total - PNB Group 8,788,494 47.83 9,297,999 49.23
Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 10.63 1,953,004 10.34KWAP 411,558 2.24 411,558 2.18
* Negligible
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Name
Pro forma VAfter Pro forma IV and
assuming full exercise of the Warrants by all other
members of the PNB Group
No. of SEB Shares(‘000) %
PNB 63,506 0.34
PNB FundsASB 8,252,058 43.56Amanah Saham Malaysia 2 - Wawasan 268,367 1.42Amanah Saham Malaysia 301,197 1.59Amanah Saham Malaysia 3 211,642 1.12Amanah Saham Bumiputera 3 - Didik 121,425 0.64Amanah Saham Bumiputera 2 29,100 0.15Amanah Saham Nasional 25,029 0.13ASN Equity 2 11,880 0.06ASN Imbang (Mixed Asset Balanced) 1 23,893 0.13ASN Equity 3 30,822 0.16ASN Imbang (Mixed Asset Balanced) 2 15,397 0.08ASN Sara (Mixed Asset Conservative) 1 - -ASN Equity 5 - -ASN Sara (Mixed Asset Conservative) 2 - -Bumiputera Wealth Fund 500 *
Total - PNB Group 9,354,817 49.39
Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 10.31KWAP 411,558 2.17
* Negligible
Scenario 2
All assumptions are same as Scenario 1 except for item (iii) above.
In Scenario 2, the respective members of the PNB Group subscribes for:-
(i) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue, but the shareholding of each member of the PNB Group does not exceed 33% of the enlarged issued share capital of SEB; and
(ii) all the excess RCPS-i.
In this scenario, none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group and the other substantial shareholders in SEB will be the same as shown in Scenario 1.
The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of the PNB Group and the substantial shareholders in SEB upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.
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5.3.3 NA and gearing
We noted from Section 11.3, Part A of the Circular that the recapitalisation exercise is expected to increase the Group’s NA base and reduce its gearing as follows:-
NA and NA per SEB Share
NA(RM’000)
NA per SEB Share(RM)
As at 31 January 2018 9,449,966 1.58
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 12,378,802 0.77(ii) Proposed Rights Issue of RCPS-i 13,346,189 0.84(iii) Full conversion of the RCPS-i 13,346,189 0.73(iv) Full exercise of the Warrants 13,827,917 0.71
The dilution in NA per SEB Share above is due to the issuance of:-
(i) the Rights Shares at the Rights Issue Price;
(ii) new SEB Shares arising from the conversion of the RCPS-i at the Implied Conversion Price; and
(iii) new SEB Shares arising from the exercise of the Warrants at the Exercise Price,
which are at prices lower than the NA per SEB Share.
Gearing
Gearing ratio(times)
As at 31 January 2018 1.74
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 1.09(ii) Proposed Rights Issue of RCPS-i 0.94(iii) Full conversion of the RCPS-i 0.94(iv) Full exercise of the Warrants 0.87
The reduction in gearing of the Group above is due to part repayment of bank borrowings amounting to RM3.96 billion as well as the enlarged NA base of the Group. Subsequent additional repayment of the Group’s borrowings using proceeds from the exercise of the Warrants in the future will further reduce the Group’s gearing to 0.87 times.
5.3.4 Earnings and EPS
The Proposed Rights Issue is expected to contribute positively to the earnings of the Group as the proceeds raised will be utilised towards reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly.
For illustration purpose, based on an interest rate of 4.4% per annum, the repayment of RM3.96 billion bank borrowings will result in finance cost savings of RM174 million per annum.
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As a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any), there will be dilution in the EPS of the Group upon issuance of such new SEB Shares.
Notwithstanding the dilution in NA per SEB Share and EPS of the Group as set out above, it is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of the Entitled Shareholders on the Entitlement Date. Accordingly, should all the Entitled Shareholders subscribe in full for their respective entitlements under the Proposed Rights Issue, there will not be any dilution to the percentage of shareholdings held by all the Entitled Shareholders and ultimately, their share of NA and earnings of the SEB Group.
Based on our evaluation above, we are of the view that the overall effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are expected to be positive to the Group.
5.4 Industry outlook and future prospects of the SEB Group
We noted the industry overview and prospects as set out in Section 10, Part A of the Circular.
The graph below sets out the movement of benchmark Brent crude oil price from 2014 up to the LPD:-
(Source: Bloomberg)
In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). Though it had since recovered slightly in the first half of 2015, the oil price continued its downtrend to a low of USD27 per barrel in January 2016 before gradually recovering to hover around USD55 per barrel in 2017.
The SEB Group was not spared from the cascading impact of prolonged depressed oil prices as it reported declining revenues and profits in the last 3 financial years whereby the Group recorded loss after tax of RM791.4 million and RM2,504.8 million for the FYE 31 January 2016 and FYE 31 January 2018, respectively. These were mainly attributable to lower contract revenue and provisions for impairment arising from weak demand for the Group’s assets and services.
USD / barrel
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In order to acclimatise to the low oil price scenario as it became the new norm, the Group undertook various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritise capital expenditure plans, revisit investment decisions and optimise capital structure. These measures were undertaken to keep the Group’s operations lean and efficient in order to enable the Group to offer competitive pricing for its services to existing and potential clients.
Moving forward, the Group is optimistic about the improvement in the prospects of the O&G industry following the gradual recovery in oil prices from mid-2017 onwards.Currently, Brent crude oil prices are hovering around USD70 to USD80 per barrel. While the Group is expected to benefit from the current uptrend in oil prices as upstream activities are beginning to pick up again, the Group may also seek to expand its capital expenditure plans (e.g. exploration and development of gas fields, acquisition of tender rigs as well as expansion of its fleet of vessels and remotely operated vehicles) in the near future to take advantage of the gradual recovery in the O&G industry and enhance its future prospects.
(Source: Management of SEB, September 2018)
According to the Short-term Energy Outlook by the U.S. Energy Information Administration (“EIA”), Brent crude oil prices is forecasted to average USD73 per barrel in 2018 and USD74 per barrel in 2019. In addition, the EIA forecasted Brent crude oil prices to remain relatively stable between USD72 per barrel and USD76 per barrel from September 2018 to the end of 2019. As oil prices continue to stabilise around the new USD70 to USD80 per barrel level, upstream players are expected to be more confident in expanding their investments in exploration, development and production activities. In turn, this is expected to lead to higher demand for O&G services and solutions.
Since the start of 2018, the Group has accumulated significant contract wins. As at the LPD, the Group has an accumulative value of RM5.3 billion in contracts wins (including those awards of contracts / subcontracts / contract extensions with a combined value of approximately RM815 million announced on 24 September 2018), representing asignificant increase in value compared to the same corresponding period in the previous year of February to October 2017 of RM1.3 billion. In addition, the Group has grown its order book to RM16.9 billion as at July 2018 (including the new contract wins) from RM14.9 billion as at 31 January 2018. As at the LPD, the Company is also in active pursuit of bids worth USD7.4 billion (equivalent to RM31.0 billion) and further prospects of USD10.2 billion (equivalent to RM42.7 billion) in key geographical markets that it operates in.
Further, as part of the Group’s strategic plan to enable its 3 business segments to operate independently so as to strengthen its core businesses, the Group is undertaking strategic partnerships for its E&P and Drilling Services business.
With a larger capital / NA base coupled with the available debt headroom upon completion of the recapitalisation exercise, the SEB Group shall be well-positioned to ride on the continued recovery of the O&G industry.
In view of the above and after taking into consideration the past experience and track record of the SEB Group in the O&G services and solutions segment, we are of the view that the future prospects of the SEB Group appear to be positive.
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5.5 Implications arising from the voting outcome of the Proposed Exemption
You should note that the SC will only consider the application for the Proposed Exemption if the PNB Group has satisfied amongst others, the following conditions pursuant to Paragraph 4.08(2) of the Rules:-
(i) There has been no acquisition of shares or instruments convertible into and options in respect of shares (other than subscriptions for, rights to subscribe for instruments convertible into or options in respect of new shares which have been disclosed in this Circular) in the 6 months prior to the announcement of the Proposals but subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directors in relation to the Proposed Rights Issue until completion of the subscription (i.e. from 26 April 2018 up to the completion of the subscription); and
(ii) Approval has been obtained from independent holders of voting shares or voting rights of SEB at a meeting of the holders of the relevant class of voting shares or voting rights to waive their rights to receive the Mandatory Offer from the PNB Group. The voting at the meeting shall be conducted by way of a poll.
Any exemption granted will be invalidated if the PNB Group has engaged or engages in a disqualifying transaction.
The implications of the non-interested shareholders’ votes on the Proposed Exemptionto be tabled at the forthcoming EGM are set out in the ensuing sections.
5.5.1 If you VOTE IN FAVOUR of the Proposed Exemption
(i) The SC would be able to consider the application by the PNB Group (which will be submitted by PNB on behalf of the PNB Group, through Maybank IB) for the Proposed Exemption. An approval from the SC for the Proposed Exemption would then exempt the PNB Group from the obligation to undertake the Mandatory Offer to acquire all the remaining SEB Shares, Warrants and RCPS-i not already owned by them upon completion of the Proposed Rights Issue.
If granted, the Proposed Exemption will be in effect for the entire tenure of 5 years for the RCPS-i and 7 years for the Warrants from their respective date of issuance and no subsequent shareholders’ approval will be required. Throughout the duration of the Proposed Exemption (if approved by the non-interested shareholders of SEB and granted by the SC), SEB will be required to disclose, in its annual accounts and any public document, including annual reports, prospectuses and circulars:-
(a) the details of the Proposed Exemption including the duration for the Proposed Exemption;
(b) the number and percentage of voting shares or voting rights and convertible securities in SEB held by the PNB Group as at the latest practicable date prior to the disclosure; and
(c) the maximum potential shareholdings of the PNB Group in SEB, if only the PNB Group (but not other holders) exercises the conversion or subscription rights or options in full.
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
47
(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).
Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.
(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-
(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and
(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.
On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-
Public shareholding
spread(1)
(%)
As at the LPD 82.2
and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 47.1(ii) Proposed Rights Issue of RCPS-i 47.1(iii) Full conversion of the RCPS-i 40.9(iv) Full exercise of the Warrants 39.7
Note:- (1) Public shareholders are classified based on the definition of ‘public’
under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-
(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;
(ii) such shareholder is not a promoter of the listed issuer; and
(iii) such shareholder is either -
(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or
(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).
90
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
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In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
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In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
48
In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.
Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.
Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).
Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.
This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-
(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);
(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);
(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and
(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.
If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.
Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-
(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and
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(ii) any substantial conversion of RCPS-i and/or exercise ofWarrants not held by the potential offeror after the Potential Offer will significantly dilute the potential offeror’s shareholding.
(iv) In view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed. Therefore, voting in favour of the Proposed Exemption will enable SEB to benefit from the recapitalisation exercise (if the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are approved by the shareholders of SEB).
5.5.2 If you VOTE AGAINST the Proposed Exemption
(i) The SC would not be able to consider the application by the PNB Group for the Proposed Exemption.
(ii) In view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, in the event that the Proposed Exemption is not approved, SEB will not be able to undertake the recapitalisation exercise. Accordingly, the recapitalisation exercise including the repayment of bank borrowings will also not materialise. Consequently, SEB will not be able to realise the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL. Save for the Proposed Rights Issue, SEB does not have any alternative equity fund raising exercise being contemplated at this juncture.
6. DIRECTORS’ INTENTION TO VOTE
As at the LPD, save as disclosed below, the Directors of SEB do not have any interest (direct and indirect) in the SEB Shares. Their intention to vote in relation to the Proposed Exemption is as follows:-
Name
Direct Indirect Intention to vote in
relation to the Proposed Exemption
No. of SEB Shares %(1)
No. of SEB Shares %(1)
TSS 37,811,692 0.63 1,007,544,718(2) 16.81 Vote in favour
Tan Sri Datuk Amar (Dr) Hamid Bugo
256,405 * 275,000(3) * Vote in favour
DSS 506,385 0.01 1,007,544,718(2) 16.81 Vote in favour
Mohamed Rashdi Mohamed Ghazalli
97,864 * 48,932(4) * Vote in favour
Datuk Ramlan Abdul Malek 485,500 0.01 - - Vote in favour
* Negligible
Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of Sapura Holdings Sdn Bhd
(“SHSB”) pursuant to Section 8 of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.
(3) Deemed interested by virtue of the shareholding held by him and his children in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.
(4) Deemed interested by virtue of the shareholding held by his spouse pursuant to Section 59 of the Act.
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7. FUTURE PLANS FOR THE SEB GROUP AND ITS EMPLOYEES
Pursuant to Paragraph 8, Schedule 2: Part II of the Rules, the PNB Group has confirmed that as at the LPD, they do not intend to effect any major change to the following:-
(i) the continuation of the business of the SEB Group;
(ii) the business of the SEB Group, including any plans to liquidate the Group, sell any material assets or re-deploy the fixed assets or effect any other major change in the structure of the SEB Group; and
(iii) the continued employment of the employees of the SEB Group,
except where such changes are in the ordinary course of the Group’s business or are necessary to rationalise or improve the Group’s operations and/or financial performance. The PNB Group shall retain the flexibility at any time to consider any options which are in the best interests of the SEB Group that may present themselves including but not limited to any strategic acquisitions and/or disposals of assets or businesses.
The PNB Group intends to maintain the listing status of SEB on the Main Market of Bursa Securities.
The undertakings provided by PNB serve to provide continued financial support to the SEB Group to embrace various challenges within the O&G industry. PNB believes in the long term prospects of the O&G industry and that the completion of the Proposed Rights Issue with Warrants and Proposed Rights Issue of RCPS-i shall place the SEB Group in a good position to ride on the potential recovery of the industry.
8. RESPONSIBILITY STATEMENT
The Board has seen, reviewed and accepted this IAL. The Board, collectively and individually, accepts full responsibility for the accuracy of the information contained in this IAL (save for the assessment, evaluation and opinion of Mercury Securities) and confirms, after having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the document have been arrived at after due and careful consideration and there are no other facts not contained in this IAL, the omission of which would make any information in this IAL misleading.
The responsibility of the Board in respect of:-
(i) the information relating to the PNB Group (as provided by the PNB Group) is limited to ensuring that such information is accurately reproduced in this IAL; and
(ii) the independent advice and expression of opinion by Mercury Securities in relation to the Proposed Exemption is limited to ensuring that accurate information in relation to the SEB Group was provided to Mercury Securities for its evaluation of the Proposed Exemption and to ensure that all information in relation to the SEB Group that are relevant to Mercury Securities’ evaluation of the Proposed Exemption have been completely disclosed to Mercury Securities and that there is no material fact, the omission of which would make any information provided to Mercury Securities false or misleading.
9. FURTHER INFORMATION
The non-interested shareholders of SEB are advised to refer to Part A of the Circular as well as the attached appendices for further information.
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10. CONCLUSION AND RECOMMENDATION
We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to the shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.
The Proposed Exemption (if granted) will allow SEB to undertake the Proposed Rights Issue (if it is also approved by the shareholders of SEB). Accordingly, the potential advantages and disadvantages of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are as follows:-
Potential advantages
(i) The support from PNB via the PNB Undertaking and the Funds’ Undertaking demonstrates its interest and commitment in SEB. Further, such support provides certainty to SEB in raising the Intended Gross Proceeds.
(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borowings and for working capital requirements.
Accordingly, the Proposed Rights Issue serves to strengthen the Group’s balance sheet by reducing its bank borrowings and increasing its equity base, thus improving its gearing position. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to capitalise on emerging opportunities in the O&G industry following the current uptrend in oil prices. Accordingly, this is expected to contribute positively towards higher revenue and future earnings to the SEB Group.
The part repayment of bank borrowings will benefit the Group in terms of:-
(a) increasing its NA base from RM9.45 billion as at 31 January 2018 to RM13.35 billion upon completion of the exercise and thereafter, to RM13.83 billion upon full conversion of the RCPS-i and full exercise of the Warrants;
(b) lowering the gearing ratio of the Group from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the exercise and thereafter, to 0.87 times upon full conversion of the RCPS-i and full exercise of the Warrants;
(c) reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly; and
(d) reducing exposure to interest rate fluctuations in view that the Group’s bank borrowings largely carry a floating interest rate.
(iii) The Proposed Rights Issue provides an opportunity for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of:-
(a) Rights Shares (with free Warrants on the basis of 1 Warrant for every 10 Rights Shares subscribed) at the Rights Issue Price of RM0.30; and
(b) RCPS-i (which shall be automatically converted into SEB Shares at the end of its 5-year tenure) at the RCPS-i Issue Price of RM0.41,
without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.
(iv) The features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i. Moreover,while the RCPS-i shall be automatically converted into SEB Shares at the end of its 5-year tenure, Entitled Shareholders also have the option to monetise their RCPS-i via disposal in the open market.
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Potential advantages
(v) Through the exercise of the Warrants in the future (if they are in-the-money), the Entitled Shareholders will be able to further increase their equity participation in SEB while also providing additional funds to the Group for working capital and/or repayment of borrowings. Alternatively, Entitled Shareholders have the option to monetise their Warrants via disposal in the open market.
Potential disadvantages
(i) The NA per SEB Share will be diluted from RM1.58 (as at 31 January 2018) to RM0.84 (upon completion of the Proposed Rights Issue) and thereafter, diluted further to RM0.71 (after full conversion of the RCPS-i and assuming the full exercise of the Warrants) as the new SEB Shares will be issued at prices lower than the NA per SEB Share whereby against the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58:-
(a) the Rights Issue Price for the Rights Shares of RM0.30 represents a discount of 81.0%;
(b) the Implied Conversion Price for the Conversion Shares of RM0.41 represents a discount of 74.1%; and
(c) the Exercise Price for the Exercised Shares of RM0.49 represents a discount of 69.0%.
The EPS of the Group will be diluted as a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any).
(ii) Subject to the Exemption Shareholding Limit as set out in Section 5.5.1 of this IAL, the Proposed Exemption will allow the increase in:-
(a) the shareholding of ASB in SEB from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares; and
(b) the collective shareholdings of the PNB Group in SEB from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares and on the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%,
without being required to undertake the Mandatory Offer.
Accordingly, ASB and the PNB Group may obtain control (i.e. shareholding of more than 33%) over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). Further, with a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.
(iii) The Warrants shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed. Accordingly, the renunciation of the Rights Shares by any Entitled Shareholders will entail the renunciation of the attached Warrants. Accordingly, they will forgo their option to either:-
(a) exercise the Warrants to increase their equity participation in SEB; or
(b) monetise the Warrants via disposal in the open market. As at the LPD, the Warrants have a theoretical value derived based on the Trinomial option pricing model of RM0.14, which shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.
(iv) Pursuant to the Proposed Rights Issue, the weighted average cost of capital of SEB will increase from 5.14% to 5.32% arising from the increase in equity financing which has a higher required rate of return as compared to debt financing.
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95
53
Premised on the above where the potential advantages outweigh the potential disadvantages, as well as our evaluation of the Proposed Exemption on a holistic basis, we are of the opinion that, on the basis of the information available to us, the Proposed Exemption is fair and reasonable.
Accordingly, we recommend that the non-interested shareholders of SEB vote in favour of the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.
Yours faithfully For and on behalf of MERCURY SECURITIES SDN BHD
CHEW SING GUAN DENIS LIM Managing Director Director / Head of Corporate Finance
96
ATTACHMENT I – INFORMATION ON SEB
54
1. HISTORY AND PRINCIPAL ACTIVITIES
SEB was set up as a special purpose company to facilitate the merger of the businesses of SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad, which was completed on 15 May 2012.
SEB was incorporated in Malaysia under the Companies Act, 1965 on 30 June 2011 as a private limited company under the name of Integral Key Sdn Bhd. It was converted into a public company under the name of Integral Key Berhad on 20 September 2011. On 19 December 2011, the Company changed its name to Sapura-Kencana Petroleum Berhad. On 5 April 2012, the Company further changed its name to SapuraKencana Petroleum Berhad before assuming its present name on 24 March 2017. SEB was listed on the Main Market of Bursa Securities on 17 May 2012.
SEB is principally involved in investment holding and provision of management services to its subsidiaries. The subsidiaries of SEB are principally engaged in the following:-
Business segments Description
Engineering and Construction (“E&C”)
Front-end engineering design (Feed), detailed design engineering (DDE), procurement, construction (fabrication), offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, diving, survey and subsea inspection, repair and maintenance (IRM) services, flexible and rigid pipelay, installation of subsea umbilicals, riser and flowlines, decommissioning of offshore structure and manufacturing and operation of remotely operated vehicles (ROV)
Drilling Services Provision of tender-assisted drilling services for the purposes of development drilling, production drilling, well completion, workovers as well as plug and abandonment for operators
Exploration and Production (“E&P”)
Exploration, development and production of crude oil and natural gas
2. SHARE CAPITAL
2.1 Issued share capital
The issued share capital of SEB as at the LPD is as follows:-
No. of SEB Shares(‘000)
Amount(RM’000)
Issued share capital 5,992,155 8,066,410
As at the LPD, there is only 1 class of shares in SEB i.e. the SEB Shares. All the SEB Shares rank pari passu in terms of voting rights and entitlements to any dividends, rights, allotments and/or distributions (including any capital distributions) which may be declared, made or paid to shareholders.
97
ATTACHMENT I – INFORMATION ON SEB (cont’d)
55
2.2 Changes in the issued share capital
There is no change in the issued share capital of SEB since the end of the FYE 31 January 2018 up to the LPD.
2.3 Convertible securities
As at the LPD, SEB does not have any convertible securities.
3. SUBSTANTIAL SHAREHOLDERS
The shareholders of SEB holding 5% or more of the total number of SEB Shares and their shareholdings in SEB based on the Register of Substantial Shareholders as at the LPD are as follows:-
Name
Direct interest Indirect interestNo. of SEB
Shares %(1)No. of SEB
Shares %(1)
STSB 953,004,474 15.90 6,522,000(2) 0.11
SHSB - - 1,007,544,718(3) 16.81
TSS 37,811,692 0.63 1,007,544,718(4) 16.81
DSS 506,385 0.01 1,007,544,718(4) 16.81
Brothers Capital Sdn Bhd - - 1,007,544,718(4) 16.81
KWAP 411,557,524 6.87 47,584,700 (5) 0.79
ASB 387,000,000 6.46 - -
Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of its shareholding in Jurudata Sdn Bhd pursuant to Section 8 of
the Act. (3) Deemed interested by virtue of being a substantial shareholder of STSB, Sapura Resources
Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd pursuant to Section 8 of the Act.
(4) Deemed interested by virtue of being a substantial shareholder of SHSB pursuant to Section 8 of the Act.
(5) Total shareholdings managed by KWAP’s fund managers pursuant to Section 8 of the Act.
4. DIRECTORS
As at the LPD, the Directors of SEB (all Malaysians) and their shareholdings in SEB are as follows:-
Name / Designation Address
Direct IndirectNo. of SEB
Shares(‘000) %(1)
No. of SEB Shares(‘000) %(1)
Dato’ Hamzah Bakar(Chairman, Non-Independent Non-Executive Director)
14 Jalan Bola Lisut 13/1740100 Shah Alam Selangor Darul Ehsan
- - - -
98
ATTACHMENT I – INFORMATION ON SEB (cont’d)
56
Name / Designation Address
Direct IndirectNo. of SEB
Shares(‘000) %(1)
No. of SEB Shares(‘000) %(1)
Tan Sri Dato’ Seri Shahril Shamsuddin(President and Group Chief Executive Officer, Non-Independent Executive Director)
66 Jalan Kuda EmasThe Mines Resort City43300 Seri KembanganSelangor Darul Ehsan
37,812 0.63 (2)1,007,545 16.81
Tan Sri Datuk Amar (Dr) Hamid Bugo(Senior Independent Non-Executive Director)
325 Jalan Siol KandisPetra Jaya93050 KuchingSarawak
256 (5)- (3)275 (5)-
Dato’ Shahriman Shamsuddin(Non-IndependentNon-Executive Director)
67 Jalan Kuda EmasThe Mines Resort City43300 Seri KembanganSelangor Darul Ehsan
506 0.01 (2)1,007,545 16.81
Mohamed Rashdi Mohamed Ghazalli(IndependentNon-Executive Director)
7 Lorong Batai BaratDamansara Heights50490 Kuala Lumpur
98 (5)- (4)49 (5)-
Gee Siew Yoong(IndependentNon-Executive Director)
62 Jalan Sri Hartamas 250480 Kuala Lumpur
- - - -
Datuk Ramlan Abdul Malek(Non-IndependentNon-Executive Director)
56 Jalan Menara U8/5Bukit Jelutong40150 Shah AlamSelangor Darul Ehsan
486 0.01 - -
Datuk Muhamad Noor Hamid(IndependentNon-Executive Director)
5 Jalan SS4B/10Kelana Jaya47301 Petaling JayaSelangor Darul Ehsan
- - - -
Datuk Ramlan Abdul Rashid(IndependentNon-Executive Director)
6 Jalan TR 7/1Tropicana Golf & Country Resort47410 Petaling JayaSelangor Darul Ehsan
- - - -
Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of SHSB pursuant to Section 8
of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.
(3) Deemed interested by virtue of the shareholding held by him and his children in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.
(4) Deemed interested by virtue of the shareholding held by his spouse pursuant to Section 59 of the Act.
(5) Negligible.
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ATTACHMENT I – INFORMATION ON SEB (cont’d)
57
5. SUBSIDIARIES AND ASSOCIATED COMPANIES
The details of the subsidiaries of SEB as at the LPD are as follows:-
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Subsidiaries of Sapura Energy Berhad
Total Marine Technology (Malaysia) Sdn Bhd
Malaysia Dormant 100
Sapura Deepwater Pte Ltd Bermuda Chartering and hiring out of vessels and barges
100
Sapura GeoSciences Sdn Bhd Malaysia Provision of offshore geotechnical and geophysical services
100
Sapura Technology Solutions Sdn Bhd Malaysia Investment holding, provision of operation and maintenance services, and provision of management services
100
Petcon (Malaysia) Sdn Bhd Malaysia Drilling of offshore oil wells 100
SapuraCrest Ventures Sdn Bhd Malaysia Investment holding 100
Crest Hidayat (L) Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura Perdana Sdn Bhd Malaysia Dormant 100
Sapura Dana SPV Pte Ltd Federal Territory of
Labuan, Malaysia
Chartering and hiring out of vessels and barges
100
SapuraCrest Petroleum Berhad Malaysia Dormant 100
Sapura Probadi Sdn Bhd Malaysia Investment holding 100
Sapura Management Services Sdn Bhd Malaysia Dormant 100
Sapura Nautical Essence Sdn Bhd Malaysia Investment holding 100
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100
ATTACHMENT I – INFORMATION ON SEB (cont’d)
58
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Sapura Offshore Sdn Bhd Malaysia Front-end engineering design (FEED), detailed design engineering (DDE), procurement, construction, offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, diving and subsea services, flexible and rigid pipelay, installation of subsea umbilicals, risers and flowlines and decommissioning of offshore structures
100
Sapura Marine Engineering Sdn Bhd Malaysia Provision of offshore construction and diving equipment
100
Geomark Sdn Bhd Malaysia Investment holding 100
Sapura Energy Ventures Sdn Bhd Malaysia Development and production of petroleum resources
100
Sapura Petroleum Sdn Bhd Malaysia Investment holding 100
Momentum Energy Sdn Bhd Malaysia Investment holding 100
Sapura Fabrication Sdn Bhd Malaysia Provision of offshore and onshore engineering, procurement, construction (fabrication), transportation, installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, marine construction, marine conversion, marine repair and infrastructure construction
100
Sapura Onshore Sdn Bhd Malaysia Investment holding, property investment and provision of engineering, fabrication and construction services
100
Sapura Engineering Sdn Bhd Malaysia Provision of front-end engineering design (FEED) and detailed design engineering (DDE)
100
SE Petroleum Berhad Malaysia Dormant 100
Sapura Pinewell Sdn Bhd Malaysia Hook-up, commissioning, maintenance brownfield rejuvenation and onshore construction
100
Sapura Petroleum Ventures Sdn Bhd Malaysia Investment holding 100
101
ATTACHMENT I – INFORMATION ON SEB (cont’d)
59
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
SEB Energy Sdn Bhd Malaysia Development and production of petroleum resources
100
Sapura Subsea Services Sdn Bhd Malaysia Provision of offshore diving andrelated services and the provision of diving equipment for rental
100
Sapura TMC Sdn Bhd Malaysia Provision of treasury management services
100
Sapura Drilling Pte Ltd (Labuan) Federal Territory of
Labuan, Malaysia
Investment holding 100
Sapura 900 Pte Ltd Federal Territory of
Labuan, Malaysia
Vessel owner and chartering 100
SapuraKencana 1200 Pte Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura 3000 Pte Ltd Federal Territory of
Labuan, Malaysia
Vessel owner and chartering 100
SapuraKencana FLB-1 Pte Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd)
Malaysia Investment holding 100
Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)
Malaysia Investment holding 100
Held through SapuraCrest Ventures Sdn Bhd
Sapura Exploration and Production (RSC) Sdn Bhd
Malaysia Investment holding 100
Held through Sapura Probadi Sdn Bhd and Sapura Drilling Asia Limited
Sapura Drilling Asia Sdn Bhd Malaysia Provision of oil drilling services 100
Varia Perdana Sdn Bhd Malaysia Investment holding 100
102
ATTACHMENT I – INFORMATION ON SEB (cont’d)
60
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Varia Perdana Sdn Bhd
Crest Tender Rigs Pte Ltd Federal Territory of
Labuan, Malaysia
Leasing and chartering of offshore oil and gas rigs
100
Held through Sapura Offshore Sdn Bhd
SapuraKencana Talent Ltd Bermuda Provision of manpower services 100
Sapura 1200 Ltd Bermuda Vessel owner and chartering 100
Sapura 3500 Ltd Bermuda Vessel owner and chartering 100
Sapura FLB-1 Ltd Bermuda Vessel owner and chartering 100
Sapura Saudi Arabia Company Saudi Arabia Engineering, procurement, construction, installation and commissioning of offshore and onshore facilities pipelines, subsea flexible pipes and cables hook-up, commissioning, brownfield rejuvenation and subseainspection, maintenance and repair services
100
Sapura Energy DMCC Dubai, United Arab Emirates
Onshore and offshore oil and gas fields services
100
Held through Sapura Offshore Sdn Bhd and Sapura Energy DMCC
Sapura Energy Do Brazil Ltda Brazil Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines
100
Held through Total Marine Technology Pty Ltd
Sapura Excersize Pty Ltd Australia Owner and operator of ROVs for the offshore oil and gas industries
94
Sapura Babalon Pty Ltd Australia Owner and operator of ROVs for the offshore oil and gas industries
94
Held through Sapura GeoSciences Sdn Bhd
Sapura Jaya Sdn Bhd Malaysia Chartering of vessels 100
103
ATTACHMENT I – INFORMATION ON SEB (cont’d)
61
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Jaya Sdn Bhd
Sapura GeoSurvey Sdn Bhd Malaysia Hydrographic surveys and related services
100
Sapura GeoTechnics Sdn Bhd Malaysia Soil investigation and geotechnical services
100
Held through Sapura GeoTechnics Sdn Bhd
Sapura GeoTechnics (S) Pte Ltd Singapore Soil investigation and geotechnical services
100
Sapura Oilserve Sdn Bhd Malaysia Provision of marine vessel transportation services
100
Held through Sapura GeoSurvey Sdn Bhd
Sapura GeoSurvey Pte Ltd Singapore Hydrographic surveys and related services
100
Sapura GeoSurvey Pty Ltd Australia Dormant 100
Held through Sapura Oilserve Sdn Bhd
Sapura Oilserve Labuan Pte Ltd Federal Territory of
Labuan, Malaysia
Leasing of vessels/barges 100
Held through Sapura Technology Solutions Sdn Bhd
Sapura Digital Solutions Sdn Bhd Malaysia Retail automation systems and maintenance services
100
Sapura Project Services Sdn Bhd Malaysia Systems integration, software development, general engineering, maintenance and related activities
100
Sapura Power Services Sdn Bhd Malaysia Provision of maintenance services to the power, utility and oil and gas industries
94.4
Sapura Diving Services Sdn Bhd Malaysia Provision of rental equipment 100
Sapura Maintenance Services Sdn Bhd Malaysia Provision of maintenance services to the power, utility and oil and gas industries
100
Sapura Petroleum Technologies Sdn Bhd Malaysia Provision of trading and maintenance services
99.7
Sapura Energy Infinite Sdn Bhd Malaysia Investment holding and provision of operations and maintenance services to the oil and gas industry
100
104
ATTACHMENT I – INFORMATION ON SEB (cont’d)
62
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Sapura Vessels Pte Ltd Federal Territory of
Labuan, Malaysia
Leasing of barges, vessels and operational equipment on bareboat basis
100
Sapura Services Sdn Bhd Malaysia Investment holding 100
Held through Sapura Energy Infinite Sdn Bhd
Sapura Energy Resources Sdn Bhd Malaysia Investment holding 100
Held through Sapura Energy Resources Sdn Bhd
Sarku Engineering Services Sdn Bhd Malaysia Provision of offshore engineering and marine support and logistic assistance for the oil and gas industry
100
Sapura Marine Ventures Sdn Bhd Malaysia Provision of crew, chartering and hiring out of barges
100
Sapura Engineering (Offshore) Sdn Bhd Malaysia Chartering and hiring out of barges, vessels and operational equipment including provision of crew
100
Sapura Prominent Energy Sdn Bhd Malaysia Dormant 100
Held through Sapura Petroleum Sdn Bhd
Sapura Nautical Bay Pte Ltd Singapore Provision of manpower services 100
Sapura Petroleum Inc. United States of America
Regional Office for business development and marketing
100
SapuraMex Pte Ltd Singapore Investment holding 100
Sapura Energy B.V. The Netherlands
Design, fabricate, install, commission and maintenance of marine offshore facilities
100
SapuraKencana Enerji Çözümleri Anonim Şirketi
Turkey Engineering, procurement, construction, installation and commissioning of offshore facilities and cables
100
Held through Sapura Nautical Bay Pte Ltd
Sapura Nautical Power Pte Ltd Singapore Investment holding 100
Held through Sapura Offshore Sdn Bhd and SapuraMex Pte Ltd
SapuraKencana Mexicana, S.A.P.I. de C.V. Mexico Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines
100
105
ATTACHMENT I – INFORMATION ON SEB (cont’d)
63
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through SapuraMex Pte Ltd
Sapura 3500 (S) Pte Ltd Singapore Chartering and hiring out of vessel
100
Held through Momentum Energy Sdn Bhd
Sapura Australia (Holdings) Pty Ltd Australia Investment holding 100
Held through Sapura Australia (Holdings) Pty Ltd
Sapura USA Holdings Incorporated United States of America
Investment holding 100
Sapura Australia Pty Ltd Australia Investment holding 100
Peritus International Limited United Kingdom
Provision of advanced subsea and floating systems engineering, project management services to offshore oil and gas projects and developments in remote, hostile and deepwater environments
100
Peritus International Pty Ltd Australia Provision of advanced subsea and floating systems engineering and project management services to offshore projects
100
Held through Held through Sapura Australia Pty Ltd
Sapura Petroleum (Australia) Pty Ltd Australia Investment holding 100
Sapura Projects Pty Ltd Australia Investment holding 100
SC Projects Australia Pty Ltd Australia Investment holding 100
Sapura Constructor Pte Ltd Singapore Vessel owner and chartering 100
Sapura Assets Pty Ltd Australia Owner and operator of marine assets
100
Held through Sapura USA Holdings Incorporated
Ocean Flow International LLC United States of America
Provision of technical consulting and advising to oil and gas operating companies
100
Peritus International Incorporated United States of America
Provision of advanced subsea and floating systems engineering and project management services to offshore oil and gas projects
100
106
ATTACHMENT I – INFORMATION ON SEB (cont’d)
64
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Momentum Energy Sdn Bhd and Sapura Australia Pty Ltd
Normand Sapura Pty Ltd Australia Sub-charter and provision of project delivery capabilities, technology and proprietary offshore assets
100
Held through Peritus International Pty Ltd
Peritus International Sdn Bhd Malaysia Provision of engineering consultancy services for the oil and gas industry
100
Held through Sapura Constructor Pte Ltd
Sapura Projects Singapore Pte Ltd Singapore Vessel leasing and chartering 100
Held through Geomark Sdn Bhd
Quippo Prakash Pte Ltd Singapore Dormant 100
Held through Sapura Fabrication Sdn Bhd
Sapura Marine Sdn Bhd Malaysia Operation and management of fabrication yard
100
Sapura Infrastructure Sdn Bhd Malaysia Dormant 100
Sapura Metering Sdn Bhd Malaysia Dormant 100
Sapura Steelworks Sdn Bhd Malaysia Dormant 70
Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Sdn Bhd
Sapura Engineering & Construction (India) Private Limited
India Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines
100
Held through Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)
Sapura HUC Sdn Bhd Malaysia Dormant 100
Sapura Fabricators Sdn Bhd Malaysia Dormant 100
Total Marine Technology Pty Ltd Australia Development of marine technology and marine chartering, specialising on ROVs
94
Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Ventures Sdn Bhd
Sapura Energy (B) Sdn Bhd Brunei Investment holding 100
ATTACHMENT I – INFORMATION ON SEB (cont’d)
64
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Momentum Energy Sdn Bhd and Sapura Australia Pty Ltd
Normand Sapura Pty Ltd Australia Sub-charter and provision of project delivery capabilities, technology and proprietary offshore assets
100
Held through Peritus International Pty Ltd
Peritus International Sdn Bhd Malaysia Provision of engineering consultancy services for the oil and gas industry
100
Held through Sapura Constructor Pte Ltd
Sapura Projects Singapore Pte Ltd Singapore Vessel leasing and chartering 100
Held through Geomark Sdn Bhd
Quippo Prakash Pte Ltd Singapore Dormant 100
Held through Sapura Fabrication Sdn Bhd
Sapura Marine Sdn Bhd Malaysia Operation and management of fabrication yard
100
Sapura Infrastructure Sdn Bhd Malaysia Dormant 100
Sapura Metering Sdn Bhd Malaysia Dormant 100
Sapura Steelworks Sdn Bhd Malaysia Dormant 70
Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Sdn Bhd
Sapura Engineering & Construction (India) Private Limited
India Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines
100
Held through Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)
Sapura HUC Sdn Bhd Malaysia Dormant 100
Sapura Fabricators Sdn Bhd Malaysia Dormant 100
Total Marine Technology Pty Ltd Australia Development of marine technology and marine chartering, specialising on ROVs
94
Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Ventures Sdn Bhd
Sapura Energy (B) Sdn Bhd Brunei Investment holding 100
107
ATTACHMENT I – INFORMATION ON SEB (cont’d)
65
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Energy (B) Sdn Bhd
RSK Petroleum Sdn Bhd Brunei To act as service provider for oil and gas industry
70
Held through Sapura Onshore Sdn Bhd
Sapura Subsea Sdn Bhd Malaysia Provision of engineering, fabrication and constructionworks
100
Sapura Assets Sdn Bhd Malaysia Property investment 100
Sapura Torsco (Hong Kong) Private Limited Hong Kong Dormant 100
Held through Sapura Petroleum Ventures Sdn Bhd
Sapura Marine Drilling Sdn Bhd Malaysia Dormant 100
Sapura Marine Rig 1 Pte Ltd Singapore Dormant 100
Sapura Nautilus Sdn Bhd Malaysia Service provider for offshore support vessels
100
Held through Sapura Nautilus Sdn Bhd
Sapura Gemia (Labuan) Pte Ltd Federal Territory of
Labuan, Malaysia
Provision of offshore support vessels for the oil and gas industry
100
Sapura Teras Ventures Sdn Bhd Malaysia Provision of offshore support vessels for the oil and gas industry
100
Sapura Redang (Labuan) Pte Ltd Federal Territory of
Labuan, Malaysia
Provision of offshore support vessels for the oil and gas industry
100
Held through Sapura Subsea Services Sdn Bhd
Sapura Marine Services Sdn Bhd Malaysia Provision of vessel related management services
100
Sapura Subsea Corporation Federal Territory of
Labuan, Malaysia
Leasing of vessels and related equipment
100
Maju Hydro Sdn Bhd Malaysia Dormant 100
Sapura SS Corporation Federal Territory of
Labuan, Malaysia
Dormant 100
108
ATTACHMENT I – INFORMATION ON SEB (cont’d)
66
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Sapura Subsea Robotics Corporation Federal Territory of
Labuan, Malaysia
Leasing of ROV and HyperbaricReception Facility
100
Held through Sapura Subsea Services Sdn Bhd, Sapura Marine Services Sdn Bhd and Sapura SS Corporation
Sapura Energy (Thailand) Limited Thailand Provision of offshore diving and related services
100
Held through Sapura Drilling Pte Ltd (Labuan)
Sapura Drilling (S) Pte Ltd Singapore Leasing of offshore oil and gas drilling rigs and providing management services
100
Sapura Drilling (Bermuda) Ltd Bermuda Investment holding 100
Sapura Drilling Resources Ltd Bermuda Provision of crew services 100
Sapura Drilling Labuan Leasing Ltd Federal Territory of
Labuan, Malaysia
Hire and charter of the oil drilling rigs
100
Held through Sapura Drilling (Bermuda) Ltd
Sapura Drilling T-10 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling T-19 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling T-7 Ltd Bermuda Dormant 100
Sapura Drilling T-9 Ltd Bermuda Dormant 100
Sapura Drilling T-20 Ltd Bermuda Dormant 100
Sapura Drilling T-11 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling T-12 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling T-17 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling T-18 Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling Menang Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling Berani Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
109
ATTACHMENT I – INFORMATION ON SEB (cont’d)
67
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Sapura Drilling Alliance Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling Pelaut Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling Setia Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry
100
Sapura Drilling Esperanza Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry
100
Sapura Drilling Jaya Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry
100
Sapura Drilling Raiqa Ltd Bermuda Leasing of offshore oil and gas drilling rig
100
Sapura Drilling Asia Limited Hong Kong Investment holding and the provision of oil drilling services
100
Sapura Drilling Services Sdn Bhd Malaysia Provision of management services for tender rig business
100
Sapura Drilling Holdings (Panama) Inc Panama Investment holding 100
Sapura Drilling T-19 Pte Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura Drilling T-20 Pte Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura Drilling Kinabalu Pte Ltd Federal Territory of
Labuan, Malaysia
Dormant 100
Sapura Drilling Teknik Berkat Ltd Bermuda Dormant 100
Held through Sapura Drilling Asia Limited
Sapura Drilling Holdings Limited Hong Kong Investment holding and the provision of oil drilling services
100
Held through Sapura Drilling Holdings (Panama) Inc. and Sapura Drilling Asia Limited
Sapura Drilling Sdn Bhd Brunei Offshore drilling, workover anddevelopment of oil and gas wells
100
110
ATTACHMENT I – INFORMATION ON SEB (cont’d)
68
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Drilling Asia Limited and Sapura Drilling Holdings Limited
SapuraKencana Drilling Angola, LDA Republic of Angola
Dormant 100
Held through Sapura Drilling Pte Ltd (Labuan) and Sapura Drilling Asia Limited
PT Sapura Nordrill Indonesia (formerly known as PT SapuraKencana Nordrill Indonesia)
Indonesia Offshore oil and gas construction and drilling services
95
Held through Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd)
Sapura Exploration and Production (Southeast Asia) Inc
Bahamas Investment holding 100
Sapura Exploration and Production (Oceania) Sdn Bhd
Malaysia Investment holding 100
Sapura Exploration and Production (Americas) Sdn Bhd
Malaysia Investment holding 100
Held through Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd) and Sapura Exploration and Production (Mexico) Sdn Bhd
SEP Block 30, S. de R.L. de C.V. Mexico Exploration, development and production of crude oil and natural gas
100
Held through Sapura Exploration and Production (NZ) Sdn Bhd (formerly known as Sapura Exploration and Production (JV) Sdn Bhd)
Sapura Exploration and Production OMV JV Sdn Bhd
Malaysia Production of crude gaseous hydrocarbon (natural gas), draining and separation of liquid hydrocarbon fractions and mining of hydrocarbon liquids, obtain through liquefaction or pyrolysis
100
Held through Sapura Exploration and Production (Southeast Asia) Inc
Sapura Exploration and Production (Malaysia) Inc.
Bahamas Investment holding 100
111
ATTACHMENT I – INFORMATION ON SEB (cont’d)
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Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Exploration and Production (Malaysia) Inc
Sapura Exploration and Production (PM) Inc Bahamas Exploration, development and production of crude oil and natural gas
100
Sapura Exploration and Production (Sabah) Inc
Bahamas Exploration, development and production of crude oil and natural gas
100
Sapura Exploration and Production (Sarawak) Inc
Bahamas Exploration, development and production of crude oil and natural gas
100
Held through Sapura Exploration and Production (RSC) Sdn Bhd
Sapura Sambang Sdn Bhd Malaysia Dormant 100
Held through Sapura Exploration and Production (Americas) Sdn Bhd
Sapura Exploration and Production (Mexico) Sdn Bhd
Malaysia Investment holding 100
Held through Sapura Exploration and Production (Ocenia) Sdn Bhd
Sapura Exploration and Production (NZ) Sdn Bhd(formerly known as Sapura Exploration and Production (JV) Sdn Bhd)
Malaysia Investment holding 100
Sapura Exploration and Production (Australia) Sdn Bhd
Malaysia Investment Holding 100
Held through Sapura Exploration and Production (Australia) Sdn Bhd
Sapura Exploration and Production (Western Australia) Pty Ltd
Australia Exploration, development and production of crude oil and natural gas
100
The details of the associated companies of SEB as at the LPD are as follows:-
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Technology Solutions Sdn Bhd
Geowell Sdn Bhd Malaysia Wireline and well completion services
30
Subang Properties Sdn Bhd Malaysia Dormant 36.2
112
ATTACHMENT I – INFORMATION ON SEB (cont’d)
70
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through SapuraCrest Ventures Sdn Bhd
Labuan Shipyard & EngineeringSdn Bhd
Malaysia Shipbuilding, ship repair, naval craft maintenance and oil and gas fabrication
50
Held through Sapura Engineering Sdn Bhd
Best Wide Engineering (M)Sdn Bhd
Malaysia Undertaking engineering and technical works
30
Matrix Maintenance Sdn Bhd Malaysia Maintenance contractors for petrol chemical plants and general industries
30
The details of the joint venture companies of SEB as at the LPD are as follows:-
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Probadi Sdn Bhd
Uzmal Oil Inc Uzbekistan Oilfield production 50
Held through Sapura Nautical Essence Sdn Bhd
SapuraAcergy Sdn Bhd Malaysia Dormant 50
SapuraAcergy Assets Pte Ltd Federal Territory of
Labuan, Malaysia
Leasing of vessels barges and equipment on bareboat basis
49
Held through SapuraAcergy Sdn Bhd
SapuraAcergy (Australia) Pty Ltd(In the process of voluntary liquidation)
Australia Management and operation of vessel and provision of offshore related works
50
Held through Sapura Nautical Power Pte Ltd
L&T Sapura Shipping Private Limited India Vessel owner and chartering 40
L&T Sapura Offshore Private Limited India Provision of engineering and installation services
40
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71
Name of companyCountry of
incorporation Principal activities
Equity interest
held(%)
Held through Sapura Offshore Sdn Bhd
Seabras Sapura Participações S.A. Brazil Investment holding 50
Seabras Sapura Holding, GmbH Austria Investment holding 50
Held through Seabras Sapura Participações S.A.
Sapura Navegação Maritima S.A. Brazil Vessel owner and chartering 50
Held through Seabras Sapura Holding, GmbH
Seabras Sapura PLSV Holding GmbH Austria Investment holding 50
Held through Seabras Sapura PLSV Holding GmbH
Seabras Sapura Holdco Ltd. Bermuda Investment holding 50
Sapura Diamante GmbH Austria Vessel owner and chartering 50
Sapura Topazio GmbH Austria Vessel owner and chartering 50
Sapura Onix GmbH Austria Vessel owner and chartering 50
Sapura Jade GmbH Austria Vessel owner and chartering 50
Sapura Rubi GmbH Austria Vessel owner and chartering 50
Held through Seabras Sapura Holdco Ltd
Seabras Sapura Talent Ltd Bermuda Provision for manpower services
50
TL Offshore PLSV1 Ltd Bermuda Dormant 50
TL Offshore PLSV2 Ltd Bermuda Dormant 50
TL Offshore PLSV3 Ltd Bermuda Dormant 50
TL Offshore PLSV4 Ltd Bermuda Dormant 50
TL Offshore PLSV5 Ltd Bermuda Dormant 50
Held through Sapura Navegação Maritima S.A.
Let’s Log Serviços Intergrados deLogística Ltda
Brazil Management of general warehouses and deposits
50
Held through Sapura Services Sdn Bhd
Sapura GE Oil & Gas Services Sdn Bhd Malaysia Provision of repair and maintenance services & sales of parts to the energy sector
51
114
ATTACHMENT I – INFORMATION ON SEB (cont’d)
72
6. PROFIT AND DIVIDEND RECORD
A summary of the Group’s results based on the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 is as follows:-
Unaudited for the 6-month FPE 31 July Audited for the FYE 31 January
2018(RM’000)
2018(RM’000)
2017(RM’000)
2016(RM’000)
Revenue 2,314,648 5,894,998 7,651,323 10,184,031
(Loss) / Profit before tax (187,847) (2,323,589) 385,248 (712,639)Income tax expense (74,649) (181,226) (179,084) (78,806)(Loss) / Profit for the year (262,496) (2,504,815) 206,164 (791,445)
(Loss) / Profit attributable to:-- equity holders of the Company (261,789) (2,503,473) 208,316 (791,555)- non-controlling interests (707) (1,342) (2,152) 110
(262,496) (2,504,815) 206,164 (791,445)
Weighted average number of ordinary shares in issue (‘000)
5,952,277 5,946,662 5,950,838 5,971,797
Basic (loss per share) / EPS (sen)(1) (4.40) (42.10) 3.50 (13.25)
Net dividend per SEB Share (sen) - - 1.00 1.35
Note:- (1) The Company does not have any dilutive potential ordinary shares. Accordingly, the diluted (loss
per share) / EPS is not presented.
Save as disclosed below, there is no material exceptional item in the audited consolidated financial statements of SEB for the past 3 financial years up to the 31 January 2018 and the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 which affected the profit for the respective financial year / period:-
(i) the Group recognised provision for impairment of RM2,029.3 million for the FYE 31January 2016 (in respect of expenditure on oil and gas properties; property, plant and equipment; and investment in joint ventures) and RM2,132.3 million for the FYE 31 January 2018 (in respect of property, plant and equipment) arising from the significant prolonged downturn in the O&G industry;
(ii) the Group recognised several one-off items in its consolidated income statement for the FYE 31 January 2017 arising from the cessation of the Berantai Risk Service Contract (“RSC”) with Petronas on 30 September 2016. The key financial impact to the consolidated income statement in relation to the cessation of the Berantai RSC are as follows:-
Impact on profit or loss for the FYE 31 January 2017Increase (RM’000)
Other income- Compensation from Petronas 1,336,488
Other expenses- Early termination payment 763,767- Accelerated depreciation and amortisation on O&G properties 607,412
Share of profit from associates and joint ventures (1)81,570
ATTACHMENT I – INFORMATION ON SEB (cont’d)
72
6. PROFIT AND DIVIDEND RECORD
A summary of the Group’s results based on the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 is as follows:-
Unaudited for the 6-month FPE 31 July Audited for the FYE 31 January
2018(RM’000)
2018(RM’000)
2017(RM’000)
2016(RM’000)
Revenue 2,314,648 5,894,998 7,651,323 10,184,031
(Loss) / Profit before tax (187,847) (2,323,589) 385,248 (712,639)Income tax expense (74,649) (181,226) (179,084) (78,806)(Loss) / Profit for the year (262,496) (2,504,815) 206,164 (791,445)
(Loss) / Profit attributable to:-- equity holders of the Company (261,789) (2,503,473) 208,316 (791,555)- non-controlling interests (707) (1,342) (2,152) 110
(262,496) (2,504,815) 206,164 (791,445)
Weighted average number of ordinary shares in issue (‘000)
5,952,277 5,946,662 5,950,838 5,971,797
Basic (loss per share) / EPS (sen)(1) (4.40) (42.10) 3.50 (13.25)
Net dividend per SEB Share (sen) - - 1.00 1.35
Note:- (1) The Company does not have any dilutive potential ordinary shares. Accordingly, the diluted (loss
per share) / EPS is not presented.
Save as disclosed below, there is no material exceptional item in the audited consolidated financial statements of SEB for the past 3 financial years up to the 31 January 2018 and the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 which affected the profit for the respective financial year / period:-
(i) the Group recognised provision for impairment of RM2,029.3 million for the FYE 31January 2016 (in respect of expenditure on oil and gas properties; property, plant and equipment; and investment in joint ventures) and RM2,132.3 million for the FYE 31 January 2018 (in respect of property, plant and equipment) arising from the significant prolonged downturn in the O&G industry;
(ii) the Group recognised several one-off items in its consolidated income statement for the FYE 31 January 2017 arising from the cessation of the Berantai Risk Service Contract (“RSC”) with Petronas on 30 September 2016. The key financial impact to the consolidated income statement in relation to the cessation of the Berantai RSC are as follows:-
Impact on profit or loss for the FYE 31 January 2017Increase (RM’000)
Other income- Compensation from Petronas 1,336,488
Other expenses- Early termination payment 763,767- Accelerated depreciation and amortisation on O&G properties 607,412
Share of profit from associates and joint ventures (1)81,570
ATTACHMENT I – INFORMATION ON SEB (cont’d)
72
6. PROFIT AND DIVIDEND RECORD
A summary of the Group’s results based on the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 is as follows:-
Unaudited for the 6-month FPE 31 July Audited for the FYE 31 January
2018(RM’000)
2018(RM’000)
2017(RM’000)
2016(RM’000)
Revenue 2,314,648 5,894,998 7,651,323 10,184,031
(Loss) / Profit before tax (187,847) (2,323,589) 385,248 (712,639)Income tax expense (74,649) (181,226) (179,084) (78,806)(Loss) / Profit for the year (262,496) (2,504,815) 206,164 (791,445)
(Loss) / Profit attributable to:-- equity holders of the Company (261,789) (2,503,473) 208,316 (791,555)- non-controlling interests (707) (1,342) (2,152) 110
(262,496) (2,504,815) 206,164 (791,445)
Weighted average number of ordinary shares in issue (‘000)
5,952,277 5,946,662 5,950,838 5,971,797
Basic (loss per share) / EPS (sen)(1) (4.40) (42.10) 3.50 (13.25)
Net dividend per SEB Share (sen) - - 1.00 1.35
Note:- (1) The Company does not have any dilutive potential ordinary shares. Accordingly, the diluted (loss
per share) / EPS is not presented.
Save as disclosed below, there is no material exceptional item in the audited consolidated financial statements of SEB for the past 3 financial years up to the 31 January 2018 and the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 which affected the profit for the respective financial year / period:-
(i) the Group recognised provision for impairment of RM2,029.3 million for the FYE 31January 2016 (in respect of expenditure on oil and gas properties; property, plant and equipment; and investment in joint ventures) and RM2,132.3 million for the FYE 31 January 2018 (in respect of property, plant and equipment) arising from the significant prolonged downturn in the O&G industry;
(ii) the Group recognised several one-off items in its consolidated income statement for the FYE 31 January 2017 arising from the cessation of the Berantai Risk Service Contract (“RSC”) with Petronas on 30 September 2016. The key financial impact to the consolidated income statement in relation to the cessation of the Berantai RSC are as follows:-
Impact on profit or loss for the FYE 31 January 2017Increase (RM’000)
Other income- Compensation from Petronas 1,336,488
Other expenses- Early termination payment 763,767- Accelerated depreciation and amortisation on O&G properties 607,412
Share of profit from associates and joint ventures (1)81,570
115
ATTACHMENT I – INFORMATION ON SEB (cont’d)
73
Note:- (1) This refers to the share of profit from Berantai Floating Production Limited (“BFPL”)
(previously an indirect 49%-owned joint venture company of SEB) arising from the cessation of the Berantai RSC. BFPL was subsequently dissolved on 14 May 2017.
7. STATEMENT OF ASSETS AND LIABILITIES
The statement of assets and liabilities of SEB based on its audited consolidated financial statements for the FYE 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements for the 6-month FPE 31 July 2018 are as follows:-
Unaudited as at 31 July Audited as at 31 January
2018 2018 2017(RM’000) (RM’000) (RM’000)
ASSETSNon-current assetsProperty, plant and equipment 11,583,170 11,454,733 15,140,032Expenditure on oil and gas properties 4,172,811 3,938,046 4,398,855Intangible assets 8,078,295 7,918,880 8,483,530Investment in associates and joint ventures 1,804,263 1,557,506 1,858,609Deferred tax assets 141,874 103,690 221,571Derivative assets 198,583 262,563 -Trade receivables 38,921 30,537 39,129Total non-current assets 26,017,917 25,265,955 30,141,726
Current assetsInventories 460,295 376,555 458,483Trade and other receivables 2,893,624 2,530,111 3,234,444Tax recoverable 100,487 103,913 95,099Cash and cash equivalents 994,235 1,716,235 3,519,509Total current assets 4,448,641 4,726,814 7,307,535TOTAL ASSETS 30,466,558 29,992,769 37,449,261
EQUITY AND LIABILITIESShare capital(1) 8,066,410 8,066,410 8,066,410Shares held under trust (114,942) (114,942) (93,304)Other reserves 1,667,345 1,443,619 2,485,032(Accumulated losses)/Retained profits (206,910) 54,879 2,617,980Equity attributable to equity holders of the Company 9,411,903 9,449,966 13,076,118Non-controlling interests (368) 399 4,190Total equity 9,411,535 9,450,365 13,080,308
Non-current liabilitiesBorrowings 11,116,782 14,692,954 15,135,967Trade and other payables 102,722 1,620 347,043Provision for assets retirement obligation 209,946 196,118 251,967Derivative liabilities - - 21,859Deferred tax liabilities 1,108,935 1,023,726 1,282,684Total non-current liabilities 12,538,385 15,914,418 17,039,520
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74
Unaudited as at 31 July Audited as at 31 January
2018 2018 2017(RM’000) (RM’000) (RM’000)
Current liabilitiesBorrowings 5,755,971 1,722,201 3,511,050Trade and other payables 2,613,061 2,797,114 3,765,602Provision for assets retirement obligation 14,112 25,086 28,377Income tax payable 133,494 83,585 24,404Total current liabilities 8,516,638 4,627,986 7,329,433Total liabilities 21,055,023 20,542,404 24,368,953TOTAL EQUITY AND LIABILITIES 30,466,558 29,992,769 37,449,261
Note:- (1) Pursuant to the commencement of the Act, all amounts standing to the credit of share premium
account of SEB has become part of its share capital.
As at the LPD, there is no known material change in the financial position or prospects of SEB subsequent to the latest audited consolidated financial statements for the FYE 31 January 2018.
Within the knowledge of the PNB Group, there has been no material change in the financial position or prospects of SEB since 31 January 2018, being the date of the last audited consolidated financial statements of SEB laid before SEB’s shareholders at its general meeting held on 18 July 2018.
8. ACCOUNTING POLICIES
The audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 have been prepared in accordance with approved accounting standards and there was no audit qualification for SEB’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by SEB which would result in a material variation to the comparable figures for the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018.
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ATTACHMENT I – INFORMATION ON SEB (cont’d)
75
9. BORROWINGS, CONTINGENT LIABILITIES AND MATERIAL COMMITMENTS
As at 31 July 2018, which is not more than 3 months preceding the LPD, the SEB Group has total outstanding borrowings of approximately RM16,872.8 million, all of which are interest bearing, as follows:-
BorrowingsAmount(RM’000)
Non-currentSecured hire purchase and finance lease liabilities 209Unsecured term loans 3,118,222Unsecured Islamic facility 3,473,298Unsecured Sukuk programme 4,525,053Total non-current borrowings 11,116,782
CurrentSecured hire purchase and finance lease liabilities 5,070Unsecured term loans 4,001,053Unsecured revolving credits 1,749,848Total current borrowings 5,755,971
Total bank borrowings 16,872,753
The details on material commitments of the SEB Group as at 31 July 2018, which is not more than 3 months preceding the LPD, are as set out in Section 3.1, Appendix VII of the Circular.
The details on contingent liabilities of the SEB Group as at the LPD are as set out in Section 3.2, Appendix VII of the Circular.
10. MATERIAL LITIGATION
The details on material litigation relating to the SEB Group are as set out in Section 4, Appendix VII of the Circular.
11. MATERIAL CONTRACTS
The SEB Group has not entered into any material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding 24 August 2018 (the date of announcement made in relation to the Proposed Rights Issue and Proposed Amendments).
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ATTACHMENT II – INFORMATION ON PNB
76
1. HISTORY AND PRINCIPAL ACTIVITIES
PNB was incorporated in Malaysia under the Companies Act 1965 on 17 March 1978.
PNB is principally involved in the acquisition and holding of shares to promote greater ownership of share capital in the corporate sector in Malaysia by Bumiputeras. As at the LPD, PNB is the investment manager for the following funds:-
(i) Unit trust funds
(a) Amanah Saham Bumiputera (“ASB”);
(b) Amanah Saham Malaysia 2 - Wawasan (formerly known as Amanah Saham Wawasan 2020) (“ASM 2 Wawasan”);
(c) Amanah Saham Malaysia (“ASM”);
(d) Amanah Saham Malaysia 3 (formerly known as Amanah Saham 1Malaysia)(“ASM 3”);
(e) Amanah Saham Bumiputera 3 - Didik (formerly known as Amanah Saham Didik) (“ASB 3 Didik”);
(f) Amanah Saham Bumiputera 2 (“ASB 2”);
(g) Amanah Saham Nasional (“ASN”);
(h) ASN Equity 2 (formerly known as Amanah Saham Nasional 2) (“ASN Equity 2”);
(i) ASN Imbang (Mixed Asset Balanced) 1 (formerly known as Amanah Saham Nasional 3 Imbang) (“ASN Imbang 1”);
(j) ASN Umbrella for ASN Equity 3 (formerly known as Amanah Saham Gemilang - Kesihatan) (“ASN Umbrella – ASN Equity 3”);
(k) ASN Umbrella for ASN Imbang (Mixed Asset Balanced) 2 (formerly known as Amanah Saham Gemilang – Pendidikan) (“ASN Umbrella – ASN Imbang 2”);
(l) ASN Umbrella for ASN Sara (Mixed Asset Conservative) 1 (formerly known as Amanah Saham Gemilang – Persaraan) (“ASN Umbrella – ASN Sara 1”);
(m) ASN Equity 5; and
(n) ASN Sara (Mixed Asset Conservative) 2 (“ASN Sara 2”);
(ii) Other funds
(a) Amanah Harta Tanah PNB;
(b) PNB Property Trust;
(c) Yayasan Tun Ismail Mohamed Ali (Berdaftar); and
(d) Bumiputera Wealth Fund.
119
ATTACHMENT II – INFORMATION ON PNB (cont’d)
77
2. SUBSTANTIAL SHAREHOLDER
The shareholder of PNB holding 5% or more of the total number of shares in PNB and its shareholding in PNB as at the LPD are as follows:-
Name
Direct IndirectNo. of shares
(‘000) %(1)No. of shares
(‘000) %(1)
Yayasan Pelaburan Bumiputera(2) 99,999 99.9 - -
Notes:- (1) Computed based on the total number of 100,000,000 shares in PNB as at the LPD. (2) The trustees of Yayasan Pelaburan Bumiputera as at the LPD are as follows:-
(i) Tun Dr. Mahathir bin Mohamad; (ii) Dato' Seri Mohamed Azmin bin Ali; (iii) Tan Sri Haji Ambrin bin Buang; and (iv) Tan Sri Dr. Zeti Akhtar Aziz.
3. DIRECTORS
As at the LPD, the directors of PNB (all Malaysians) are as follows:-
Name Designation Address
Tan Sri Dr. Zeti Akhtar Aziz Chairman D19-2, One MenerungJalan Menerung, Bangsar 59100 Kuala Lumpur
Dato' Abdul Rahman bin Ahmad President & Group Chief Executive
No. 1A, Lorong 14/47B46100 Petaling JayaSelangor
Tan Sri Dr. Ali bin Hamsa Director Rumah Kediaman Rasmi Ketua Setiausaha NegaraNo. 1, Jalan Presint 10/5, Presint 1060200 Putrajaya
Tan Sri Dr. Wan Abdul Aziz bin Wan Abdullah Director No. 3, Jalan AU5C/6Lembah Keramat 154200 Kuala Lumpur
Datu Haji Soedirman bin Haji Aini Director No. 76, Lorong 3 AJalan Pelita, Petra Jaya83050 KuchingSarawak
Datuk Dr. Mohd. Yaakub bin Haji Johari Director No. 135, Jalan Kg Tg Aru Lama88100 Tanjung AruSabah
Tan Sri Zarinah Sameehah binti Anwar Director 30, Lorong Taman Pantai 7Bukit Pantai59100 Kuala Lumpur
As at the LPD, the directors of PNB do not have any interest (direct and indirect) in the shares of PNB.
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ATTACHMENT II – INFORMATION ON PNB (cont’d)
78
4. PROFIT AND DIVIDEND RECORD
A summary of PNB’s results based on its audited financial statements for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-
Audited for the FYE 31 December2017
(RM’000)2016
(RM’000)2015
(RM’000)
Revenue 3,992,427 2,564,985 3,556,538
Profit before taxation and zakat 3,139,771 1,653,096 3,450,703Taxation and zakat (82,387) 12 (105,186)Profit for the year 3,057,384 1,653,108 3,345,517
No. of shares in issue (‘000) 100,000 100,000 100,000
Basic earnings per share (RM)(1)(2) 30.57 16.53 33.46
Net dividend per share (RM) - - -
Notes:- (1) The basic earnings per share (which is computed based on profit for the year divided by the total
number of shares in PNB) is not disclosed in the audited financial statements of PNB and is shown for illustration purposes only.
(2) The company does not have any dilutive potential ordinary shares. Accordingly, the diluted earnings per share is not presented.
There is no material exceptional item in the audited financial statements of PNB for the past 3 financial years up to the FYE 31 December 2017.
5. STATEMENT OF ASSETS AND LIABILITIES
The statement of assets and liabilities of PNB based on its audited financial statements for the FYE 31 December 2017 is as follows:-
Audited as at 31 December2017 2016
(RM’000) (RM’000)
ASSETSNon-current assetsProperty and equipment 813,266 762,405Intangible assets 13,885 12,488Investment properties 2,217,445 3,525,304Investments in subsidiaries 6,373,081 6,446,700Investments in associates 15,862,443 13,864,870Other investments 11,070,257 9,745,390Investments in unit trusts 446,664 798,971Long term receivables 2,038,041 1,777,263Total non-current assets 38,835,082 36,933,391
Current assetsTax recoverable 116,411 83,017Receivables 3,501,809 1,576,154Cash and bank balances 3,226,057 3,563,610Asset held for sale 607,709 -Total current assets 7,451,986 5,222,781TOTAL ASSETS 46,287,068 42,156,172
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79
Audited as at 31 December2017 2016
(RM’000) (RM’000)
EQUITY AND LIABILITIESEQUITYShare capital 100,000 100,000Sekim reserve 144,952 619,852Investment reserve 500,000 500,000Retained profits 29,316,971 26,399,684Total equity 30,061,923 27,619,536
LIABILITIESNon-current liabilitiesBorrowings 13,265,358 12,322,718Income for Program Pembangunan Rakyat Termiskin 130,887 123,389Program for ASW – Bandar 28,890 27,960Professorial Chair – Tun Ismail Mohamed Ali 4,891 4,713Bumiputera Wealth Fund 209,459 208,381Total non-current liabilities 13,639,485 12,687,161
Current liabilitiesPayables 525,983 538,585Borrowings 1,444,680 832,180Provision for bonus distribution 614,997 478,710Total current liabilities 2,585,660 1,849,475Total liabilities 16,225,145 14,536,636TOTAL EQUITY AND LIABILITIES 46,287,068 42,156,172
As at the LPD, there is no known material change in the financial position or prospects of PNB subsequent to the latest audited financial statements for the FYE 31 December 2017.
6. ACCOUNTING POLICIES
The audited financial statements of PNB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for PNB’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by PNB which would result in a material variation to the comparable figures for the audited financial statements of PNB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017.
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122
ATTACHMENT III – INFORMATION ON ASB
80
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB is a unit trust fund constituted on 21 October 1989 and launched on 2 January 1990 under the management of PNB.
ASB invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,
Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB is PNB.
4. MANAGEMENT COMPANY
The management company of ASB is Amanah Saham Nasional Berhad (“ASNB”), which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-
FYE 31 December2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 10,805,595 10,462,603 10,208,205
Net income before taxation / after taxation 10,153,005 9,826,229 9,113,804
Income distribution per unit (sen) 7.00 6.75 7.25Bonus per unit (sen) 0.25 0.50 0.50Special bonus per unit (sen) 1.00 - -
There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB for the FYE 31 December 2017. As at 31 December 2017, the total unit holders’ capital was RM145,903,000,000 comprising 145,903,000,000 units.
As at the LPD, there is no known material change in the financial position of ASB subsequent to the latest annual report of ASB for the FYE 31 December 2017.
ATTACHMENT III – INFORMATION ON ASB
80
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB is a unit trust fund constituted on 21 October 1989 and launched on 2 January 1990 under the management of PNB.
ASB invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,
Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB is PNB.
4. MANAGEMENT COMPANY
The management company of ASB is Amanah Saham Nasional Berhad (“ASNB”), which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-
FYE 31 December2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 10,805,595 10,462,603 10,208,205
Net income before taxation / after taxation 10,153,005 9,826,229 9,113,804
Income distribution per unit (sen) 7.00 6.75 7.25Bonus per unit (sen) 0.25 0.50 0.50Special bonus per unit (sen) 1.00 - -
There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB for the FYE 31 December 2017. As at 31 December 2017, the total unit holders’ capital was RM145,903,000,000 comprising 145,903,000,000 units.
As at the LPD, there is no known material change in the financial position of ASB subsequent to the latest annual report of ASB for the FYE 31 December 2017.
ATTACHMENT III – INFORMATION ON ASB
80
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB is a unit trust fund constituted on 21 October 1989 and launched on 2 January 1990 under the management of PNB.
ASB invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,
Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB is PNB.
4. MANAGEMENT COMPANY
The management company of ASB is Amanah Saham Nasional Berhad (“ASNB”), which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-
FYE 31 December2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 10,805,595 10,462,603 10,208,205
Net income before taxation / after taxation 10,153,005 9,826,229 9,113,804
Income distribution per unit (sen) 7.00 6.75 7.25Bonus per unit (sen) 0.25 0.50 0.50Special bonus per unit (sen) 1.00 - -
There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB for the FYE 31 December 2017. As at 31 December 2017, the total unit holders’ capital was RM145,903,000,000 comprising 145,903,000,000 units.
As at the LPD, there is no known material change in the financial position of ASB subsequent to the latest annual report of ASB for the FYE 31 December 2017.
ATTACHMENT III – INFORMATION ON ASB
80
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB is a unit trust fund constituted on 21 October 1989 and launched on 2 January 1990 under the management of PNB.
ASB invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,
Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB is PNB.
4. MANAGEMENT COMPANY
The management company of ASB is Amanah Saham Nasional Berhad (“ASNB”), which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-
FYE 31 December2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 10,805,595 10,462,603 10,208,205
Net income before taxation / after taxation 10,153,005 9,826,229 9,113,804
Income distribution per unit (sen) 7.00 6.75 7.25Bonus per unit (sen) 0.25 0.50 0.50Special bonus per unit (sen) 1.00 - -
There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB for the FYE 31 December 2017. As at 31 December 2017, the total unit holders’ capital was RM145,903,000,000 comprising 145,903,000,000 units.
As at the LPD, there is no known material change in the financial position of ASB subsequent to the latest annual report of ASB for the FYE 31 December 2017.
123
ATTACHMENT III – INFORMATION ON ASB (cont’d)
81
7. ACCOUNTING POLICIES
Based on the annual reports of ASB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASB which would result in a material variation to the comparable figures for the audited financial statements of ASB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017.
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124
ATTACHMENT IV – INFORMATION ON ASM 2 WAWASAN
82
1. HISTORY AND PRINCIPAL ACTIVITIES
ASM 2 Wawasan is a unit trust fund constituted on 14 August 1996 and launched on 28 August 1996 under the management of PNB.
ASM 2 Wawasan invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASM 2 Wawasan is PNB.
4. MANAGEMENT COMPANY
The management company of ASM 2 Wawasan is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASM 2 Wawasan’s results for the FYE 31 August 2016, 31 August 2017 and 31 August 2018 is as follows:-
FYE 31 August2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 1,475,185 1,387,514 1,410,170
Net income before taxation / after taxation 1,153,483 1,157,290 1,191,645
Income distribution per unit (sen) 6.00 6.00 6.30
There is no material exceptional item for the past 3 financial years up to the FYE 31 August 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASM 2 Wawasan for the FYE 31 August 2018. As at 31 August 2018, the total unit holders’ capital was RM19,773,100,000 comprising 19,773,100,000 units.
As at the LPD, there is no known material change in the financial position of ASM 2 Wawasan subsequent to the latest annual report of ASM 2 Wawasan for the FYE 31 August 2018.
125
ATTACHMENT IV – INFORMATION ON ASM 2 WAWASAN (cont’d)
83
7. ACCOUNTING POLICIES
Based on the annual reports of ASM 2 Wawasan for the FYE 31 August 2016, 31 August 2017 and 31 August 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM 2 Wawasan’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASM 2 Wawasan which would result in a material variation to the comparable figures for the audited financial statements of ASM 2 Wawasan for the FYE 31 August 2016, 31 August 2017 and 31 August 2018.
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126
ATTACHMENT V – INFORMATION ON ASM
84
1. HISTORY AND PRINCIPAL ACTIVITIES
ASM is a unit trust fund constituted on 13 April 2000 and launched on 20 April 2000 under the management of PNB.
ASM invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASM is PNB.
4. MANAGEMENT COMPANY
The management company of ASM is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASM’s results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018is as follows:-
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 1,373,526 1,277,129 1,349,731
Net income before taxation / after taxation 1,057,896 1,064,837 1,054,340
Income distribution per unit (sen) 6.25 6.00 6.30
There is no material exceptional item for the past 3 financial years up to the FYE 31 March 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASM for the FYE 31 March 2018. As at 31 March 2018, the total unit holders’ capital was RM18,357,593,000 comprising 18,357,593,000 units.
As at the LPD, there is no known material change in the financial position of ASM subsequent to the latest annual report of ASM for the FYE 31 March 2018.
127
ATTACHMENT V – INFORMATION ON ASM (cont’d)
85
7. ACCOUNTING POLICIES
Based on the annual reports of ASM for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASM which would result in a material variation to the comparable figures for the audited financial statements of ASM for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.
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128
ATTACHMENT VI – INFORMATION ON ASM 3
86
1. HISTORY AND PRINCIPAL ACTIVITIES
ASM 3 is a unit trust fund constituted on 25 June 2009 and launched on 5 August 2009 under the management of PNB.
ASM 3 invests in a portfolio of various asset classes, comprising securities listed on Bursa Securities or on recognised overseas stock exchange, unlisted securities, fixed income and money market instruments as well as other capital market instruments in Malaysia as permitted by the deed of ASM 3, and in any recognised market as approved in the deed of ASM 3.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASM 3 is PNB.
4. MANAGEMENT COMPANY
The management company of ASM 3 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASM 3’s results for the FYE 30 September 2015, 30 September 2016 and 30 September 2017 is as follows:-
FYE 30 September2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 874,805 785,155 815,463
Net income before taxation / after taxation 724,081 702,433 537,268
Income distribution per unit (sen) 6.00 6.10 6.40
There is no material exceptional item for the past 3 financial years up to the FYE 30 September 2017.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASM 3 for the FYE 30 September 2017. As at 30 September 2017, the total unit holders’ capital was RM12,068,700,000 comprising 12,068,700,000 units.
As at the LPD, there is no known material change in the financial position of ASM 3 subsequent to the latest annual report of ASM 3 for the FYE 30 September 2017.
129
ATTACHMENT VI – INFORMATION ON ASM 3 (cont’d)
87
7. ACCOUNTING POLICIES
Based on the annual reports of ASM 3 for the FYE 30 September 2015, 30 September 2016 and 30 September 2017, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM 3’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASM 3 which would result in a material variation to the comparable figures for the audited financial statements of ASM 3 for the FYE 30 September 2015, 30 September 2016 and 30 September 2017.
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130
ATTACHMENT VII – INFORMATION ON ASB 3 DIDIK
88
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB 3 Didik is a unit trust fund constituted on 14 April 2001 and launched on 20 April 2001 under the management of PNB.
ASB 3 Didik invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB 3 Didik is PNB.
4. MANAGEMENT COMPANY
The management company of ASB 3 Didik is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB 3 Didik’s results for the FYE 30 June 2016, 30 June 2017 and 30 June 2018is as follows:-
FYE 30 June2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 439,785 314,270 430,928
Net income before taxation / after taxation 313,592 240,944 348,131
Income distribution per unit (sen) 6.25 6.00 6.30
There is no material exceptional item for the past 3 financial years up to the FYE 30 June 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB 3 Didik for the FYE 30 June 2018. As at 30 June 2018, the total unit holders’ capital was RM5,845,500,000 comprising 5,845,500,000 units.
As at the LPD, there is no known material change in the financial position of ASB 3 Didik subsequent to the latest annual report of ASB 3 Didik for the FYE 30 June 2018.
131
ATTACHMENT VII – INFORMATION ON ASB 3 DIDIK (cont’d)
89
7. ACCOUNTING POLICIES
Based on the annual reports of ASB 3 Didik for the FYE 30 June 2016, 30 June 2017 and 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB 3 Didik’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASB 3 Didik which would result in a material variation to the comparable figures for the audited financial statements of ASB 3 Didik for the FYE 30 June 2016, 30 June 2017 and 30 June 2018.
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132
ATTACHMENT VIII – INFORMATION ON ASB 2
90
1. HISTORY AND PRINCIPAL ACTIVITIES
ASB 2 is a unit trust fund constituted on 26 March 2014 and launched on 2 April 2014 under the management of PNB.
ASB 2 invests in a mixed asset portfolio within the approved investment limits of equities, variable and fixed income securities, money market instruments as well as other securities in Malaysia, and/or any eligible market as permitted in the deed of ASB 2.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,
Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASB 2 is PNB.
4. MANAGEMENT COMPANY
The management company of ASB 2 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASB 2’s results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018is as follows:-
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 625,859 406,029 238,669
Net income before taxation / after taxation 577,843 392,213 218,572
Income distribution per unit (sen) 6.75 6.50 7.05
There is no material exceptional item for the past 3 financial years up to the FYE 31 March 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities published in the latest annual report of ASB 2 for the FYE 31 March 2018. As at 31 March 2018, the total unit holders’ capital was RM9,353,550,000 comprising 9,353,550,000 units.
As at the LPD, there is no known material change in the financial position of ASB 2 subsequent to the latest annual report of ASB 2 for the FYE 31 March 2018.
133
ATTACHMENT VIII – INFORMATION ON ASB 2 (cont’d)
91
7. ACCOUNTING POLICIES
Based on the annual reports of ASB 2 for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB 2’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASB 2 which would result in a material variation to the comparable figures for the audited financial statements of ASB 2 for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.
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134
ATTACHMENT IX – INFORMATION ON ASN
92
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN is a unit trust fund constituted on 14 April 1981 and launched on 20 April 1981 under the management of PNB.
ASN invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASN is PNB.
4. MANAGEMENT COMPANY
The management company of ASN is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASN’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the 6-month financial period ended (“FPE”) 30 June 2018 is as follows:-
FPE 30 June FYE 31 December2018
(RM’000)2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 9,341 68,883 36,692 32,962
Net (loss) / income before taxation / after taxation
(2,875) 45,814 16,155 11,477
Income distribution per unit (sen) - 3.65 5.00 6.10
There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017 and the 6-month FPE 30 June 2018.
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135
ATTACHMENT IX – INFRMATION ON ASN (cont’d)
93
6. STATEMENT OF ASSETS AND LIABILITIES
The statement of assets and liabilities of ASN based on its audited financial statements for the FYE 31 December 2017 and 6-month FPE 30 June 2018 is as follows:-
Audited as at Audited as at 31 December30 June 2018 2017 2016
(RM’000) (RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
767,948 1,014,702 958,986
Investments carried at fair value through profit or loss
159,365 168,623 158,432
Deposits with financial institutions 312,498 288,109 173,247Tax recoverable 16,476 16,459 16,449Receivables 5,672 9,682 2,692Amounts due from stockbroker 22,707 - 33,372Amount due from PNB 341 - -Cash in bank 3 1,297 989TOTAL ASSETS 1,285,010 1,498,872 1,344,167
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,356,918 1,389,400 1,364,379Reserves (79,241) 34,035 (131,796)Total equity 1,277,677 1,423,435 1,232,583
LIABILITIESDistribution payable - 69,423 92,855Amounts owing to manager 1,065 1,297 1,166Amount owing to PNB 1,921 - -Amounts owing to stockbroker - 1,263 14,815Payables 4,347 3,454 2,748Total liabilities 7,333 75,437 111,584TOTAL EQUITY AND LIABILITIES 1,285,010 1,498,872 1,344,167
As at the LPD, there is no known material change in the financial position of ASN subsequent to the latest audited financial statements of ASN for the 6-month FPE 30 June 2018.
7. ACCOUNTING POLICIES
Based on the annual reports of ASN for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the audited financial statements of ASN for the 6-month FPE 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASN which would result in a material variation to the comparable figures for the audited financial statements of ASN for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the 6-month FPE 30 June 2018.
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136
ATTACHMENT X – INFORMATION ON ASN EQUITY 2
94
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Equity 2 is a unit trust fund constituted on 8 June 1999 and launched on 9 June 1999 under the management of PNB.
ASN Equity 2 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income, and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian Bumiputera individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
Bumiputera minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASN Equity 2 is PNB.
4. MANAGEMENT COMPANY
The management company of ASN Equity 2 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASN Equity 2’s results for the FYE 30 June 2016, 30 June 2017 and 30 June 2018 is as follows:-
FYE 30 June2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 38,401 38,352 35,361
Net income before taxation / after taxation 25,970 25,601 22,449
Income distribution per unit (sen) 3.10 3.10 3.45
There is no material exceptional item for the past 3 financial years up to the FYE 30 June 2018.
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137
ATTACHMENT X – INFORMATION ON ASN EQUITY 2 (cont’d)
95
6. STATEMENT OF ASSETS AND LIABILITIES
The statement of assets and liabilities of ASN Equity 2 based on its audited financial statements for the FYE 30 June 2018 is as follows:-
Audited as at 30 June2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
533,482 664,876
Investments carried at fair value through profit or loss 95,302 123,294Deposits with financial institutions 282,113 167,337Tax recoverable 631 597Receivables 3,324 1,841Amount due from stockbrokers 1,790 1,565Amount due from PNB 3,282 -Cash at bank 3 3TOTAL ASSETS 919,927 959,513
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 841,555 825,672Reserves 30,447 84,881Total equity 872,002 910,553
LIABILITIESDistribution payable 46,884 45,864Amounts owing to manager 758 831Payables 283 329Amounts owing to stockbrokers - 1,936Total liabilities 47,925 48,960TOTAL EQUITY AND LIABILITIES 919,927 959,513
As at the LPD, there is no known material change in the financial position of ASN Equity 2 subsequent to the latest annual report of ASN Equity 2 for the FYE 30 June 2018.
7. ACCOUNTING POLICIES
Based on the annual reports of ASN Equity 2 for the FYE 30 June 2016, 30 June 2017 and 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Equity 2’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASN Equity 2 which would result in a material variation to the comparable figures for the audited financial statements of ASN Equity 2 for the FYE 30 June 2016, 30 June 2017 and 30 June 2018.
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138
ATTACHMENT XI – INFORMATION ON ASN IMBANG 1
96
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Imbang 1 is a unit trust fund constituted on 24 September 2001 and launched on 16 October 2001 under the management of PNB.
ASN Imbang 1 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASN Imbang 1 is PNB.
4. MANAGEMENT COMPANY
The management company of ASN Imbang 1 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of ASN Imbang 1’s results for the FYE 30 November 2015, 30 November 2016 and30 November 2017 as well as the 6-month FPE 31 May 2018 is as follows:-
FPE 31 May 2018
(RM’000)
FYE 30 November2017
(RM’000)2016
(RM’000)2015
(RM’000)
Total investment income 14,955 48,525 42,651 48,874
Net income before taxation / after taxation
6,105 30,967 25,597 34,034
Income distribution per unit (sen)
- 5.00 6.00 6.20
There is no material exceptional item for the past 3 financial years up to the FYE 30 November 2017 and the 6-month FPE 31 May 2018.
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139
ATTACHMENT XI – INFORMATION ON ASN IMBANG 1 (cont’d)
97
6. STATEMENT OF ASSETS AND LIABILITIES
The statement of assets and liabilities of ASN Imbang 1 based on its audited financial statements for the FYE 30 November 2017 and 6-month FPE 31 May 2018 is as follows:-
Audited as at Audited as at 30 November31 May 2018 2017 2016
(RM’000) (RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
600,888 657,991 745,653
Investments carried at fair value through profit or loss
421,205 407,407 245,901
Deposits with financial institutions 275,615 313,664 267,794Tax recoverable 637 615 475Receivables 6,101 7,761 12,281Amounts due from stockbroker - 30,741 -Amount due from PNB - - 2,932Cash in bank 43 3 211TOTAL ASSETS 1,304,489 1,418,182 1,275,247
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,353,663 1,367,677 1,254,732Reserves (57,455) (30,863) (51,682)Total equity 1,296,208 1,336,814 1,203,050
LIABILITIESDistribution payable - 64,766 70,783Amounts owing to stockbroker 4,534 15,174 -Amounts owing to PNB 2,269 - -Amounts owing to manager 1,198 1,189 1,107Payables 280 239 307Total liabilities 8,281 81,368 72,197TOTAL EQUITY AND LIABILITIES 1,304,489 1,418,182 1,275,247
As at the LPD, there is no known material change in the financial position of ASN Imbang 1 subsequent to the latest audited financial statements of ASN Imbang 1 for the 6-month FPE 31 May 2018.
7. ACCOUNTING POLICIES
Based on the annual reports of ASN Imbang 1 for the FYE 30 November 2015, 30 November 2016 and 30 November 2017 as well as the audited financial statements of ASN Imbang 1 for the 6-month FPE 31 May 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Imbang 1’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASN Imbang 1 which would result in a material variation to the comparable figures for the audited financial statements of ASN Imbang 1 for the FYE 30 November 2015, 30 November 2016 and 30 November 2017 as well as the 6-month FPE 31 May 2018.
140
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1)
98
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Umbrella is a unit trust fund constituted on 11 March 2003 and launched on 17 March 2003 under the management of PNB. ASN Umbrella is the umbrella fund for (i) ASN Umbrella – ASN Equity 3, (ii) ASN Umbrella – ASN Imbang 2 and (iii) ASN Umbrella – ASN Sara 1.
These funds invest in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in these funds include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of these funds is PNB.
4. MANAGEMENT COMPANY
The management company of these funds is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of the results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018 is as follows:-
(i) ASN Umbrella – ASN Equity 3
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 79,363 56,888 32,533
Net income before taxation / after taxation
55,769 38,727 19,667
Income distribution per unit (sen) 5.20 4.25 7.00
(ii) ASN Umbrella – ASN Imbang 2
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 46,793 41,273 20,046
Net income before taxation / after taxation
33,784 30,353 11,492
Income distribution per unit (sen) 4.80 4.50 6.00
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1)
98
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Umbrella is a unit trust fund constituted on 11 March 2003 and launched on 17 March 2003 under the management of PNB. ASN Umbrella is the umbrella fund for (i) ASN Umbrella – ASN Equity 3, (ii) ASN Umbrella – ASN Imbang 2 and (iii) ASN Umbrella – ASN Sara 1.
These funds invest in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in these funds include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of these funds is PNB.
4. MANAGEMENT COMPANY
The management company of these funds is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of the results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018 is as follows:-
(i) ASN Umbrella – ASN Equity 3
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 79,363 56,888 32,533
Net income before taxation / after taxation
55,769 38,727 19,667
Income distribution per unit (sen) 5.20 4.25 7.00
(ii) ASN Umbrella – ASN Imbang 2
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 46,793 41,273 20,046
Net income before taxation / after taxation
33,784 30,353 11,492
Income distribution per unit (sen) 4.80 4.50 6.00
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1)
98
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Umbrella is a unit trust fund constituted on 11 March 2003 and launched on 17 March 2003 under the management of PNB. ASN Umbrella is the umbrella fund for (i) ASN Umbrella – ASN Equity 3, (ii) ASN Umbrella – ASN Imbang 2 and (iii) ASN Umbrella – ASN Sara 1.
These funds invest in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.
2. UNIT HOLDERS
Eligible investors in these funds include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of these funds is PNB.
4. MANAGEMENT COMPANY
The management company of these funds is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
A summary of the results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018 is as follows:-
(i) ASN Umbrella – ASN Equity 3
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 79,363 56,888 32,533
Net income before taxation / after taxation
55,769 38,727 19,667
Income distribution per unit (sen) 5.20 4.25 7.00
(ii) ASN Umbrella – ASN Imbang 2
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 46,793 41,273 20,046
Net income before taxation / after taxation
33,784 30,353 11,492
Income distribution per unit (sen) 4.80 4.50 6.00
141
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
99
(iii) ASN Umbrella – ASN Sara 1
FYE 31 March2018
(RM’000)2017
(RM’000)2016
(RM’000)
Total investment income 37,543 18,274 10,472
Net income before taxation / after taxation
26,310 12,881 6,508
Income distribution per unit (sen) 5.15 5.15 6.80
There is no material exceptional item for the past 3 financial years up to the FYE 31 March 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
The statements of assets and liabilities of the funds based on the audited financial statements of ASN Umbrella for the FYE 31 March 2018 are as follows:-
(i) ASN Equity 3
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
1,362,460 1,075,447
Investments carried at fair value through profit or loss
244,341 252,323
Deposits with financial institutions 457,076 431,716Tax recoverable 958 559Receivables 8,110 7,016Amounts due from stockbroker - 78,681Cash in bank 3 3TOTAL ASSETS 2,072,948 1,845,745
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,887,939 1,709,488Reserve 77,820 17,592Total equity 1,965,759 1,727,080
LIABILITIESDistribution payable 99,427 73,521Amounts owing to stockbroker 5,649 43,298Amounts owing to manager 1,838 1,578Payables 275 268Total liabilities 107,189 118,665TOTAL EQUITY AND LIABILITIES 2,072,948 1,845,745
142
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
100
(ii) ASN Imbang 2
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
571,130 437,858
Investments carried at fair value through profit or loss
378,661 194,713
Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452
LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392
(iii) ASN Sara 1
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
441,037 264,943
Investments carried at fair value through profit or loss
500,206 106,053
Deposits with financial institutions 387,584 179,481Tax recoverable 520 449Receivables 8,515 2,637Amounts due from stockbroker 1,977 8,837Cash in bank 69 32TOTAL ASSETS 1,339,908 562,432
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585
LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
100
(ii) ASN Imbang 2
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
571,130 437,858
Investments carried at fair value through profit or loss
378,661 194,713
Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452
LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392
(iii) ASN Sara 1
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
441,037 264,943
Investments carried at fair value through profit or loss
500,206 106,053
Deposits with financial institutions 387,584 179,481Tax recoverable 520 449Receivables 8,515 2,637Amounts due from stockbroker 1,977 8,837Cash in bank 69 32TOTAL ASSETS 1,339,908 562,432
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585
LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
100
(ii) ASN Imbang 2
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
571,130 437,858
Investments carried at fair value through profit or loss
378,661 194,713
Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452
LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392
(iii) ASN Sara 1
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
441,037 264,943
Investments carried at fair value through profit or loss
500,206 106,053
Deposits with financial institutions 387,584 179,481Tax recoverable 520 449Receivables 8,515 2,637Amounts due from stockbroker 1,977 8,837Cash in bank 69 32TOTAL ASSETS 1,339,908 562,432
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585
LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
100
(ii) ASN Imbang 2
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
571,130 437,858
Investments carried at fair value through profit or loss
378,661 194,713
Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452
LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392
(iii) ASN Sara 1
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
441,037 264,943
Investments carried at fair value through profit or loss
500,206 106,053
Deposits with financial institutions 387,584 179,481Tax recoverable 520 449Receivables 8,515 2,637Amounts due from stockbroker 1,977 8,837Cash in bank 69 32TOTAL ASSETS 1,339,908 562,432
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585
LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
100
(ii) ASN Imbang 2
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
571,130 437,858
Investments carried at fair value through profit or loss
378,661 194,713
Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452
LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392
(iii) ASN Sara 1
As at 31 March2018 2017
(RM’000) (RM’000)
ASSETSInvestments carried at fair value through other comprehensive income
441,037 264,943
Investments carried at fair value through profit or loss
500,206 106,053
Deposits with financial institutions 387,584 179,481Tax recoverable 520 449Receivables 8,515 2,637Amounts due from stockbroker 1,977 8,837Cash in bank 69 32TOTAL ASSETS 1,339,908 562,432
EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585
LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432
143
ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)
101
As at the LPD, there is no known material change in the financial position of the funds subsequent to the latest annual report of ASN Umbrella for the FYE 31 March 2018.
7. ACCOUNTING POLICIES
Based on the annual reports of ASN Umbrella for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Umbrella’s financial statements for the respective years under review.
There is no change in the accounting standards adopted by ASN Umbrella which would result in a material variation to the comparable figures for the audited financial statements of ASN Umbrella for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.
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144
ATTACHMENT XIII – INFORMATION ON ASN EQUITY 5
102
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Equity 5 is a unit trust fund constituted on 17 August 2018 and commenced on 24 September 2018 under the management of PNB.
ASN Equity 5 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income securities and money market instruments.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASN Equity 5 is PNB.
4. MANAGEMENT COMPANY
The management company of ASN Equity 5 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
There is no profit and dividend record for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.
7. ACCOUNTING POLICIES
There is no audited financial statements for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.
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145
ATTACHMENT XIV – INFORMATION ON ASN SARA 2
103
1. HISTORY AND PRINCIPAL ACTIVITIES
ASN Sara 2 is a unit trust fund constituted on 17 August 2018 and commenced on 24 September 2018 under the management of PNB.
ASN Sara 2 invests in fixed income securities and liquid assets, equities and other investments as permitted by the deed of ASN Sara 2.
2. UNIT HOLDERS
Eligible investors in the fund include:-
(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian
minor who holds a valid birth certificate but is below 18 years of age.
3. INVESTMENT MANAGER
The investment manager of ASN Sara 2 is PNB.
4. MANAGEMENT COMPANY
The management company of ASN Sara 2 is ASNB, which is a wholly-owned subsidiary of PNB.
5. PROFIT AND DIVIDEND RECORD
There is no profit and dividend record for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.
6. STATEMENT OF ASSETS AND LIABILITIES
There is no statement of assets and liabilities for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.
7. ACCOUNTING POLICIES
There is no audited financial statements for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.
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146
ATTACHMENT XV – INFORMATION ON BUMIPUTERA WEALTH FUND
104
Bumiputera Wealth Fund is a pool of money managed by PNB for the purpose of promoting and enhancing Bumiputera wealth in the economy in general, and specifically for the benefit of Bumiputera unit holders of the unit trust funds managed by PNB starting from 19 December 2014.
Bumiputera Wealth Fund invests in equity and money market.
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147
ATTACHMENT XVI – FURTHER INFORMATION
105
1. DISCLOSURE OF INTERESTS AND DEALINGS IN SHARES
1.1 By the PNB Group
(i) Interests in SEB
Save as disclosed below, the PNB Group does not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD:-
Name
Direct IndirectNo. of SEB
Shares(‘000) %(1)
No. of SEB Shares(‘000) %(1)
PNB 19,641 0.33 - -ASB 387,000 6.46 - -ASM 2 Wawasan 83,000 1.39 - -ASM 93,154 1.55 - -ASM 3 65,456 1.09 - -ASB 3 Didik 37,554 0.63 - -ASB 2 9,000 0.15 - -ASN 7,741 0.13 - -ASN Equity 2 3,674 0.06 - -ASN Imbang 1 7,390 0.12 - -ASN Umbrella – ASN Equity 3 9,533 0.16 - -ASN Umbrella – ASN Imbang 2 4,762 0.08 - -ASN Umbrella – ASN Sara 1 - - - -ASN Equity 5 - - - -ASN Sara 2 - - - -Bumiputera Wealth Fund 500 0.01 - -
Note:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the
LPD.
(ii) Dealings in the securities of SEB
Save as disclosed below, the PNB Group has not dealt (directly or indirectly)in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
Name of transacting party
Date oftransaction
Nature oftransaction
No. of SEB Shares
Average transacted price
(RM)
ASB
15.03.2018 Disposal 3,019,800 0.47716.03.2018 Disposal 3,000,000 0.49219.03.2018 Acquisition 10,000,000 0.49522.03.2018 Disposal 5,000,000 0.54026.03.2018 Disposal 10,000,000 0.560
ASM 19.03.2018 Disposal 10,000,000 0.49526.03.2018 Acquisition 10,000,000 0.560
ASB 213.03.2018 Disposal 2,000,000 0.45214.03.2018 Disposal 2,000,000 0.42226.03.2018 Disposal 1,500,000 0.563
148
ATTACHMENT XVI – FURTHER INFORMATION (cont’d)
106
Name of transacting party
Date oftransaction
Nature oftransaction
No. of SEB Shares
Average transacted price
(RM)
ASN 27.03.2018 Disposal 1,600,000 0.557
ASN Equity 2 22.03.2018 Disposal 10,000,000 0.540
ASN Equity 3
13.03.2018 Disposal 500,000 0.45214.03.2018 Disposal 250,000 0.43015.03.2018 Disposal 2,500,000 0.47726.03.2018 Disposal 300,000 0.56308.05.2018 Disposal 1,000,000 0.669
1.2 By the directors of the PNB Group
(i) Interests in SEB
The directors of the PNB Group do not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD.
(ii) Dealings in the securities of SEB
The directors of the PNB Group have not dealt (directly or indirectly) in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
1.3 By the persons who have irrevocably committed themselves to vote in favour or against the Proposals
As at the LPD, there is no person who has irrevocably committed himself to vote in favour or against the Proposals.
1.4 By the persons with whom the PNB Group or any persons acting in concert with them has borrowed or lent
As at the LPD, there is no person with whom the PNB Group or any persons acting in concert with them has borrowed or lent any voting shares or convertible securities of SEB.
1.5 By the persons with whom the PNB Group or any persons acting in concert with them has any arrangement
As at the LPD, there is no person with whom the PNB Group or any persons acting in concert with them has entered into any arrangement, including any arrangement involving rights over SEB Shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to SEB Shares which may be an inducement to deal or to refrain from dealing.
1.6 By SEB
(i) Dealings in its own securities
SEB has not dealt (directly or indirectly) in any of its own voting shares or convertible securities during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
149
ATTACHMENT XVI – FURTHER INFORMATION (cont’d)
107
(ii) Interests in the PNB Group
SEB does not have any interest (whether direct or indirect) in any voting shares or convertible securities of the PNB Group as at the LPD.
(iii) Dealings in the securities of the PNB Group
SEB has not dealt (directly or indirectly) in any voting shares or convertible securities of the PNB Group during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
1.7 By the Directors of SEB
(i) Interests in SEB
Save as disclosed below, the Directors of SEB do not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD:-
Name
Direct IndirectNo. of SEB
Shares(‘000) %(1)
No. of SEB Shares(‘000) %(1)
TSS 37,812 0.63 (2)1,007,545 16.81
Tan Sri Datuk Amar (Dr) Hamid Bugo 256 (3)- (4)275 (3)-
DSS 506 0.01 (2)1,007,545 16.81
Mohamed Rashdi Mohamed Ghazalli
98 (3)- (5)49 (3)-
Datuk Ramlan Abdul Malek 486 0.01 - -
Notes:- (1) Based on 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of SHSB
pursuant to Section 8 of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.
(3) Negligible. (4) Deemed interested by virtue of the shareholding held by him and his children
in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.
(5) Deemed interested by virtue of the shareholding held by his spouse pursuant to Section 59 of the Act.
(ii) Dealings in the securities of SEB
The Directors of SEB have not dealt (directly or indirectly) in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
(iii) Interests in the PNB Group
The Directors of SEB do not have any interest (whether direct or indirect) in any voting shares or convertible securities of the PNB Group as at the LPD.
150
ATTACHMENT XVI – FURTHER INFORMATION (cont’d)
108
(iv) Dealings in the securities of the PNB Group
The Directors of SEB have not dealt (directly or indirectly) in any voting shares or convertible securities of the PNB Group during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.
1.8 By the persons with whom SEB or any persons acting in concert with it has borrowed or lent
As at the LPD, there is no person with whom SEB or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of SEB.
1.9 By the persons with whom SEB or any persons acting in concert with it has any arrangement
As at the LPD, there is no person with whom SEB or any persons acting in concert with it has entered into any arrangement, including any arrangement involving rights over SEB Shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to SEB Shares which may be an inducement to deal or to refrain from dealing.
1.10 By Mercury Securities and funds whose investments are managed by Mercury Securities on a discretionary basis (“Discretionary Funds”)
Mercury Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of SEB as at the LPD.
2. ARRANGEMENT AFFECTING DIRECTORS
(i) As at the LPD, no payment or other benefit will be made or given to any Director of SEB as compensation for loss of office or otherwise in connection with the Proposals.
(ii) As at the LPD, there is no agreement or arrangement between any Director of SEB and any other person which is conditional on or dependent upon the outcome of the Proposals or otherwise connected with the outcome of the Proposals.
(iii) As at the LPD, the PNB Group has not entered into any material contract in which any Director of SEB has a material personal interest.
(iv) As at the LPD, there is no agreement, arrangement or understanding existing between the PNB Group and any of the Directors or recent Directors of SEB, holders of voting shares or voting rights or recent holders of voting shares or voting rights of SEB having any connection with or dependence upon the Proposals.
3. SERVICE CONTRACTS
As at the LPD, the SEB Group does not have any service contracts with any Directors or proposed Directors of SEB Group, which have been entered into or amended within 6 months before the announcement of the Proposals on 24 August 2018 or which are fixed term contracts with more than 12 months to run.
For the purpose of this section, the term “service contracts” excludes those expiring or determinable by the employing company without payment of compensation within 12 months from the date of this IAL.
151
APPENDIX I
SALIENT TERMS OF THE WARRANTS
137
Issue size : Up to 998,692,515 Warrants.
Issue price : The Warrants are to be issued free together with the Rights Shares.
Issue Date : The date on which the Warrants are issued and allotted.
Form and denomination : The Warrants, which are issued with the Rights Shares, are immediately detached upon issuance and will be separately traded on Bursa Securities. The Warrants will be issued in registered form and constituted by the Deed Poll.
Basis of allotment : One (1) Warrant for every ten (10) Rights Shares subscribed by the Entitled Shareholders.
Expiry Date : The day falling immediately before the seventh (7th) anniversary of the Issue Date and if such date is not a Market Day, then on the preceding Market Day.
Exercise Period : The Warrants may be exercised at any time within a period of seven (7) years commencing from and including the Issue Date and ending at 5.00 p.m. on the Expiry Date. Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid.
Exercise Price : RM0.49 per Warrant.
Exercise Rights : Subject to the provisions of the Deed Poll, each Warrant shall entitle the registered holder to subscribe for one (1) new SEB Share at the Exercise Price during the Exercise Period.
Mode of exercise : The Warrant holders shall pay cash for the Exercise Price when exercising the Warrants for new SEB Shares.
Rights of Warrant holders
: The Warrant holders are not entitled to any voting rights or participate in any distribution and/or offer of further securities in our Company until and unless such Warrant holders are issued with the Exercised Shares.
Ranking of the Warrants : The Warrants shall as between the Warrant holders rank equally in all respect.
Ranking of the Exercise Shares
: The Exercised Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Exercised Shares.
Adjustments in the Exercise Price and/or number of Warrants
: Subject to the provisions of the Deed Poll, the Exercise Price and/or number of Warrants in issue may from time to time be adjusted,calculated or determined by our Board, in consultation with its professional advisers, in the event of alteration to the share capital of our Company, a capital distribution by our Company or certain issue of shares or convertible securities by our Company in accordance with the provisions of the Deed Poll.
Transferability : The Warrants shall be transferable in the manner provided under the Securities Industry (Central Depositories) Act 1991 and the rules of Bursa Depository.
152
APPENDIX I
SALIENT TERMS OF THE WARRANTS (Cont’d)
138
Board lot : For the purpose of trading on Bursa Securities, a board lot of Warrants shall comprise 100 units of Warrants.
Amendments to the rights of the Warrant holders
: Subject to the provisions of the Deed Poll, no amendment or addition may be made to the provisions of the Deed Poll without the sanction by a special resolution of the holders of the Warrants unless the amendments or additions:
(a) are required to correct any typographical errors; or
(b) are relating to purely administrative matters; or
(c) to comply with mandatory provisions of the law.
Rights in the event of winding-up, compromise or arrangement and consolidation, amalgamation and merger
: Where a resolution has been passed for a member’s voluntary winding-up of our Company, or where there is a compromise or arrangement whether or not for the purpose of or in connection with a scheme for the reconstruction of our Company or the amalgamation of our Company with one (1) or more companies, then:
(a) if such winding-up, compromise or arrangement has been approved by a special resolution of the holder of the Warrants or some person designated by them for such purpose by special resolution, the terms of such winding-up, compromise or arrangement shall be binding on all the Warrant holders; and
(b) in any other case, every Warrant holder shall be entitled upon and subject to the provisions of the Deed Poll at any time within six (6) weeks after the passing of such resolution for a member’s voluntary winding-up of our Company or within six (6) weeks after the granting of the court order approving the compromise or arrangement (other than a consolidation, amalgamation or merger in which our Company is the continuing corporation), by the irrevocable surrender of his/her Warrants to our Company, elect to be treated as if he/she had immediately prior to the commencement of such winding-up, compromise or arrangement, exercised the Exercise Rights represented by such Warrants to the extent specified in the relevant exercise forms and be entitled to receive out of the assets of our Company which would be available in liquidation as if he/she had on such date been the holder of the Exercised Shares to which he/she would have been entitled to pursuant to such exercise.
Listing status : The Warrants will be listed and quoted on the Main Market of Bursa Securities.
Governing law : Laws of Malaysia.
153
APPENDIX II
SALIENT TERMS OF THE RCPS-i
139
Issue size : Up to 2,396,862,035 RCPS-i.
RCPS-i Issue Price : RM0.41 per RCPS-i.
Issue Date : A date to be determined by our Board.
Entitlement basis : Two (2) RCPS-i for every five (5) SEB Shares held on Entitlement Date.
Form and constitution : The RCPS-i will be issued in registered form and constituted by our Constitution.
Board lot : For the purposes of trading on the Bursa Securities, a board lot of RCPS-i shall comprise 100 RCPS-i.
Tenure : Five (5) years from the Issue Date.
Maturity Date : The day immediately preceding the fifth (5th) anniversary from the Issue Date.
Shariah Compliance : The Shariah Adviser appointed for the Proposed Rights Issue of RCPS-i had pronounced that the RCPS-i is in compliance with the principles of Shariah. Please refer to Appendix VI for the Shariah Pronouncement Letter.
Dividend rate : (a) The RCPS-i shall carry the right to receive preferential dividends, out of the distributable profits of our Company earned from the first day of the calendar month following the Issue Date (“Profits”), when declared and approved by our Board, at the expected preferential dividend rate of five percent (5%) per annum (“Expected Preferential Dividend Rate”).
(b) Subject to the availability of Profits, the preferential dividends shall be distributable semi-annually (save in respect of the firstdistribution), with the RCPS-i holders being entitled to the first distribution no later than six (6) months following the Issue Date, and subsequently, at successive intervals of every six (6) months thereafter (each of the aforementioned dates shall be referred to as "Preferential Dividend Entitlement Date").
(c) The maximum amount of preferential dividends that can be declared and paid on each Preferential Dividend Entitlement Date (“Expected Preferential Dividend Amount”) shall be capped at such Expected Preferential Dividend Rate unless otherwise decided by our Board.
(d) On any Preferential Dividend Entitlement Date:
(i) in the event that the Profits are lower than the Expected Preferential Dividend Amount and our Company does not declare the preferential dividends up to the Expected Preferential Dividend Amount (in whole or in part):
154
APPENDIX II
SALIENT TERMS OF THE RCPS-i (Cont’d)
140
(aa) our Company may, at its discretion, declare and pay any amount of preferential dividends up to an amount equal to the Profits as at such Preferential Dividend Entitlement Date. (The amount of Profits declared as preferential dividends by our Company on a particular Preferential Dividend Entitlement Date, if any, shall be referred to as "Declared Sum"); and
(bb) the amount equivalent to the difference between: (A) the Profits as at such Preferential Dividend Entitlement Date; and (B) Declared Sum, shall be cumulative ("Deferred Dividends 1"), so long as the RCPS-i remains unredeemed. In this instance, the amount equivalent to the difference between: (A) the Expected Preferential Dividend Amount; and (B) the Profits as at such Preferential Dividend EntitlementDate, shall not be cumulative; and
(ii) in the event that the Profits are more than the Expected Preferential Dividend Amount and our Company does not declare the preferential dividends up to the Expected Preferential Dividend Amount (in whole or in part):
(aa) the amount equivalent to the difference between: (A) the Expected Preferential Dividend Amount; and (B) the Declared Sum, shall be cumulative ("Deferred Dividends 2"), so long as the RCPS-i remains unredeemed.
(e) Deferred Dividends 1 and Deferred Dividends 2 (as the case may be) (collectively, "Deferred Dividends") may be declared and/or paid, at the discretion of our Company, on any subsequent Preferential Dividend Entitlement Date, provided that the Cumulative Condition is fulfilled on such Preferential Dividend Entitlement Date.
"Cumulative Condition" of the RCPS-i means on any particular Preferential Dividend Entitlement Date, our Company:
(i) has sufficient Profits that is at least equivalent to the aggregate of: (A) the Declared Sum; and (B) any Deferred Dividends accumulated as at and on such Preferential Dividend Entitlement Date;
(ii) has maintained books and records that evidence our Company having Profits that is at least equivalent to the aggregate of: (A) the Declared Sum; and (B) any Deferred Dividends accumulated as at and on such Preferential Dividend Entitlement Date; and
(iii) makes an announcement on the Main Market of Bursa Securities that such amount of Deferred Dividends on such Preferential Dividend Entitlement Date shall be cumulative.
155
APPENDIX II
SALIENT TERMS OF THE RCPS-i (Cont’d)
141
(f) The Deferred Dividends shall not be payable to the RCPS-i holders if our Company has not declared it as a preferential dividend. For clarity, the Deferred Dividends that are not declared will not be payable in the following circumstances:
(i) upon the winding-up, liquidation or dissolution of our Company. Accordingly, the RCPS-i holders shall (in and for compliance with Shariah, and by the decision of our Board at the relevant time on their behalf) waive all Deferred Dividends that our Company has not declared; and
(ii) upon the RCPS-i holders converting the RCPS-i to SEBShares. Accordingly, the RCPS-i holders shall (in and for compliance with Shariah) waive all Deferred Dividends that our Company has not declared.
(g) Where there are no Profits available for the declaration and payment of dividends (in accordance with our Constitution and the Act), our Company shall have no obligation to declare or distribute any preferential dividends on the relevant Preferential Dividend Entitlement Date. Such preferential dividends shall not be cumulative.
(h) Each RCPS-i holder shall cease to receive any preferential dividends from and including the date the RCPS-i is converted into new SEB Shares save for preferential dividends declared and unpaid (including Deferred Dividends) up to the date of the conversion.
(i) By subscribing to the RCPS-i, the RCPS-i holders agree (in and for compliance with Shariah) to waive its right to receive any distribution of profit with, such waiver to be decided by our Board at the relevant time on behalf of the RCPS-i holders.
Conversion rights : The RCPS-i shall be converted into new SEB Shares on the Maturity Date without the payment of any consideration (cash or otherwise) and in accordance with the Conversion Ratio.
Conversion Ratio : The conversion ratio shall be one (1) new SEB Share for one (1) RCPS-i held. If the conversion results in a fractional entitlement to new SEB Shares, such fractional entitlement shall be disregarded and no refund or credit, whether in the form of RCPS-i, cash or otherwise, shall be given in respect of the disregarded fractional entitlement.
The Conversion Ratio shall be subject to adjustments from time to time, at the determination of our Board, in the event of any alteration to the share capital of SEB, whether by way of rights issue, capitalisation issue, consolidation of shares, subdivision of shares or reduction of capital howsoever being effected, in accordance with the provisions of our Constitution. Our Company shall give notice in writing to the RCPS-i holders of its intention to make such adjustments to the Conversion Ratio.
156
APPENDIX II
SALIENT TERMS OF THE RCPS-i (Cont’d)
142
Participation in profits : Subject to the rights to the preferential dividends and any additional preferential dividends, the RCPS-i holders shall not be entitled to participate in the surplus profits (if any) remaining at such time after the payment of the preferential dividends and such additional preferential dividends (if any).
Redemption : (a) Our Company may at any time after the Issue Date, at its discretion, redeem wholly or in part on a pro rata basis the outstanding RCPS-i by giving not less than thirty (30) days’ notice in writing to the RCPS-i holders of its intention to do so, subject to compliance with the Act, including where such RCPS-i is intended to be redeemed out of the capital of our Company, such notice of redemption shall be subject to all directors of our Company having made a solvency statement in relation to such redemption in accordance with the provisions of the Act. The redemption of the RCPS-i shall take effect on the 30th day from the date of the notice or such other later date as may be specified in the notice ("Redemption Date"). The Redemption Date and book closure date to be used to determine the RCPS-i holders who are entitled to receive the redemption payment shall be stated in the notice.
(b) On the Redemption Date, our Company shall redeem, wholly or in part on a pro rata basis, the outstanding RCPS-i in cash at a redemption price, which shall be the aggregate of: (i) the Issue Price of the RCPS-i; (ii) any preferential dividends declared but unpaid as at the Redemption Date; (iii) any Deferred Dividends as at the Redemption Date; and (iv) a redemption adjustment that yields an effective return of ten percent (10%) per annum,computed based on the internal rate of return formula, from the Issue Date and up to the Redemption Date, out of the distributable profits of our Company and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date ("Redemption Price").
(c) Upon redemption of the RCPS-i, the RCPS-i holders shall (in and for compliance with Shariah) waive their rights to receive any Profit that has not been declared as preferential dividend by ourCompany and which do not form any part of the Deferred Dividends from the period beginning on the last dividend declaration date preceding the Redemption Date up to the Redemption Date. By subscribing to the RCPS-i, the RCPS-iholders agree (in and for compliance with Shariah) to this waiver with such waiver to be decided by our Board at the point of redemption on their behalf.
Restrictions on payment of dividends to SEB Shares
: (a) So long as any RCPS-i remains unredeemed, and in the event that dividends are declared and the preferential treatment is approved by the Board on the day of the dividend declaration, the Company shall not pay or distribute any dividend on SEB Shares, unless the preferential dividend payable on the RCPS-i for the period immediately preceding such ordinary share dividend and any preferential dividends declared but unpaid or Deferred Dividends, has been paid or otherwise provided for in full.
157
APPENDIX II
SALIENT TERMS OF THE RCPS-i (Cont’d)
143
(b) In the event that dividends are declared, and subject to the Board approving the payment and affirming the priority of payment, the ordinary shareholders shall waive their right to dividend payment, unless and until the Company has paid such preferential dividends declared but unpaid or Deferred Dividend to the RCPS-i holders. For avoidance of doubt, it is agreed that the passing of the resolution at the EGM of the ordinary shareholders to amend the Constitution (embedding the rights of the RCPS-i holders), shall represent their agreement in and for compliance with Shariah, for the priority of distribution (of dividends) to be decided by the Board at the point of distribution on their behalf.
Rights to receive notices, reports, and audited financial statements, andattend meetings and voting rights
: The RCPS-i holders shall be entitled to the same rights as ourCompany’s ordinary shareholders as regards to the receipt of notices (including that of general meetings), reports and audited financial statements, to attend meetings and to receive shareholders’ resolutions in writing, but shall not be entitled to vote or approve any shareholders’ resolution or vote at any general meeting, save and except in respect of any resolution made:
(a) when the preferential dividends or any part thereof is in arrears and unpaid for more than six (6) months;
(b) on a proposal to reduce the share capital of SEB;
(c) on a proposal for the disposal of substantially the whole of ourCompany’s property, business and undertaking;
(d) on a proposal to wind-up our Company;
(e) during the winding-up of our Company; or
(f) on any proposal that affects the rights and privileges attached to the RCPS-i, including the amendments to our Constitution.
In any of the aforesaid circumstances, each RCPS-i holder shall be entitled to vote at all general meetings of the members of its class, and on a poll at any such general meetings to one (1) vote for each RCPS-i held.
Ranking of the RCPS-i : As at the LPD, our Company has no other preference shares in issue.
The RCPS-i shall rank equally amongst themselves, and will rank ahead in point of priority to the holders of the SEB Shares and all other classes of shares (if any) in our Company, in respect of payment out of the assets of our Company upon any liquidation, dissolution or winding-up of our Company, provided always that our Board approves such payment of dividends and payment out of the assets of ourCompany on this basis and further affirms the priority of payment to the holders of the RCPS-i.
The RCPS-i shall rank subordinated to all our Company’s creditors in respect of payment of debt and payments out of assets of ourCompany upon liquidation, dissolution, or winding-up of our Company.
158
APPENDIX II
SALIENT TERMS OF THE RCPS-i (Cont’d)
144
Our Company shall not issue any preference shares (other than additional RCPS-i) which rank equally with or in priority to, the RCPS-i unless the issue of such securities has first been approved by the RCPS-i holders by way of an ordinary resolution of such holders.
Ranking of the Conversion Shares
: The Conversion Shares will, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they will not be entitled to any dividends, rights, allotments and/or other distributions of which the entitlement date is before the date of allotment of the Conversion Shares.
Rights in the event of winding-up, dissolution or liquidation
(a) On a return of capital on the dissolution, winding-up or liquidation of our Company, the RCPS-i holders shall have, in priority to the holders of ordinary shares and all other classes of shares (if any) in our Company, the right to payment of: (i) all capital paid up on the RCPS-i; and (ii) any preferential dividends declared but unpaid, but shall have no right to the residue (if any) of such surplus assets that shall remain after payment of the capital paid up on all other classes of shares in our Company.
(b) Subject to the approval of our Board for the distribution, the holdersof ordinary shares and all other classes of shares (if any) in our Company shall waive their right to receive proceeds from liquidation, dissolution or winding-up for the benefit of the RCPS-iholders until the RCPS-i holders have received their payment in full on all capital paid up on the RCPS-i by the respective holder, and any preferential dividends declared but unpaid. For avoidance of doubt, it is agreed that the passing of a resolution at an EGM of the ordinary shareholders to amend the Constitution (embedding the rights of the RCPS-i holders), shall represent their agreement (in and for compliance with Shariah) for the priority of distribution (of assets upon the liquidation, dissolution or winding-up of our Company) to be decided by our Board at the point of distribution on their behalf.
(c) Our Company shall pay in cash and in full, the amount which shall be equivalent to: (i) all the capital paid up on the RCPS-i by the respective holder; and (ii) any preferential dividends declared but unpaid upon liquidation, dissolution or winding-up of our Company, out of the proceeds of liquidation of the assets of our Company.
(d) By subscribing to the RCPS-i, the RCPS-i holders agree (in and for compliance with Shariah) to waive any Deferred Dividends that have not been declared as preferential dividends by our Company up to the point of liquidation, dissolution or winding-up of our Company, with such waiver to be decided by our Board at the relevant time on their behalf.
Transferability : The RCPS-i shall be transferable, subject however to the applicable laws, regulations and rules that would apply to the securities of ourCompany.
Listing status : The RCPS-i and the Conversion Shares will be listed and quoted on the Main Market of Bursa Securities.
Governing law : Laws of Malaysia.
Rating : The RCPS-i will not be rated.
159
160
APPENDIX III
DRAFT BY-LAWS (Cont’d)
146
“Grantee” : An Eligible Person who has accepted an Offer in accordance with By-Law 7
“Listing Requirements” : Main Market Listing Requirements of Bursa Securities
“Market Day” : A day on which the stock market of the Bursa Securities is open for trading in securities
“Maximum Allowable Allotment”
: The maximum number of Options that can be offered to an Eligible Person as stipulated in By-Law 6
“Maximum Shares” : The maximum number of Shares which to be allotted and issued pursuant to the exercise of the Options that may be granted under the Scheme as stipulated in By-Law 4
“Offer” : An offer made in writing by the ESOS Committee to an Eligible Person in accordance with By-Law 5
“Option” : The right of a Grantee to subscribe for new SEB Shares pursuant to the contract constituted by acceptance of an Offer in accordance with By-Law 7
“Option Exercise Price” : The price at which the Grantee shall be entitled to subscribe for each new SEB Share as determined in accordance with By-Law 8
“Option Period” : A period commencing from the Date of Offer and expiring on the last day of the Scheme
“Relevant Subsidiaries” : A subsidiary of the Company within the meaning of Section 4 of the Act other than a company which is dormant and shall include a subsidiary as may be incorporated or acquired by SEB from time to time during the Scheme Period
“Scheme or ESOS” : The scheme for the granting of Options to Eligible Persons to subscribe for new SEB Shares up to but not exceeding in aggregate such number which represents ten percent (10%) of the issued share capital (excluding treasury shares, if any) of theCompany at any one time, on the terms as established by these By-Laws
“Senior Management” : Such executives as the ESOS Committee may determine to be senior management of the SEB Group
“Scheme Period” : The duration of the Scheme as provided in By-Law 23
“SEB” or “the Company” : Sapura Energy Berhad (Company No. 950894-T)
161
APPENDIX III
DRAFT BY-LAWS (Cont’d)
147
“SEB Group” or “Group Company”
: SEB and/or its Relevant Subsidiaries
“SEB Shares” : Ordinary shares in the capital of the Company and “SEB Share” means any one of them
“SICDA” : Securities Industry (Central Depositories) Act, 1991
“WAMP” : Weighted average market price
1.2 In these By-Laws, unless the context otherwise requires –
(a) a reference to legislation includes any amendment to that legislation, any consolidation or replacement of it, and any subordinate legislation made under it and any rules, regulations and guidelines issued under that legislation or subsidiary legislation
(b) a reference to a document, including these By-Laws, includes any amendment or supplement to, or replacement or novation of, that document or these By-Laws, as the case may be;
(c) any reference to a By-Law is a reference to a By-Law of these By-Laws;
(d) the headings to the provisions are for convenience only, and shall not be taken into account in the interpretation of these By-Laws;
(e) any word importing:
(i) the singular meaning includes the plural meaning and vice versa; and
(ii) the masculine gender includes the feminine gender and vice versa;
(f) any liberty or power which may be exercised, or any decision or determination which may be made, under these By-Laws –
(i) by the Board may be exercised in the Board’s sole and absolute discretion and the Board shall not be under any obligation to give reason therefor; and
(ii) by the ESOS Committee may be exercised in the ESOS Committee’s sole and absolute discretion and the ESOS Committee shall not be under any obligation to give reason therefor, but subject always to the Board’s power to overrule any decision of the ESOS Committee;
(g) if an event is to occur on a stipulated day which is not a Market Day, then the stipulated day shall be taken to be the first Market Day after that day; and if an event is to occur on a stipulated day which falls after the expiry of the Scheme then the stipulated day shall be taken to be the last Market Day of the Scheme Period; and
(h) in the event of any change in the name of the Company from its present name, all references to “Sapura Energy Berhad” or “SEB” in these By-Laws and all other documents pertaining to the Scheme shall be deemed to be references to the Company’s new name.
162
APPENDIX III
DRAFT BY-LAWS (Cont’d)
148
2. NAME AND OBJECTIVE OF THE SCHEME
2.1 This Scheme shall be called the “SEB Executive Share Option Scheme”.
2.2 The Scheme is aimed at retaining and motivating Eligible Persons by instilling in them a sense of ownership of the Company with a view to retaining their services and encouraging them to improve their performance, standards and efficiency.
3. MAXIMUM AMOUNT OF SHARES AVAILABLE UNDER THE SCHEME
3.1 Subject to By-Law 3.2, the maximum number of Shares which may be allotted and issued pursuant to the exercise of the Options that may be granted under the Scheme shall not in aggregate exceed ten percent (10%) of the issued share capital (excluding treasury shares, if any) of the Company at any point in time during the duration of the Scheme Period (“Maximum Shares”). The following shall not be included in the determination of compliance with the Maximum Shares:
(a) The number of SEB Shares comprised in Offers made under the Scheme but not accepted in accordance with By-Law 7.
(b) The number of SEB Shares comprised in the unexercised balance of Options at the time of termination of such Options pursuant to By-Law 12.
3.2 In the event the total number of Shares made available under the Scheme exceeds the Maximum Shares as a result of the Company reducing its own issued and paid-up share capital in accordance with the provisions of the Act or undertakes any other corporate proposal resulting in the reduction of its issued and paid-up share capital, all Offers awarded prior to the said variation of the issued and paid-up share capital of the Company shall remain valid and may vest in accordance with the provisions of this Scheme as if that reduction had not occurred. However no additional Offer shall be made unless the total number of Shares which may be allotted and issued under the Scheme in respect of the Offer by the Company shall fall below the Maximum Shares.
3.3 The Company shall, during the duration of the Scheme Period, make available sufficient unissued shares in the authorised share capital of the Company to satisfy all outstanding Offers.
4. MAXIMUM ALLOWABLE ALLOTMENT AND BASIS OF ALLOCATION
4.1 Subject to any adjustments which may be made under these By-Laws, the maximum number of Options that may be granted under the Scheme to any one Eligible Person shall be at the sole and absolute discretion of the ESOS Committee after taking into consideration the position, performance and length of service of the Eligible Person in SEB Group, or such other factors which the ESOS Committee may in its absolute discretion deem fit, subject to –
(a) the Executive Directors and senior management of SEB Group do not participate in the deliberation or discussion in respect of his/her own allocation; and
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(b) the number of Shares to be allocated to any Eligible Person who, either singly or collectively through persons connected with such Eligible Person, holds twenty percent (20%) or more of the total issued share capital (excluding treasury shares, if any) of the Company, does not exceed ten percent (10%) (or such percentage as allowable by the relevant authorities) of the total number of new Shares to be issued under the Scheme,
provided always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other requirements of the relevant authorities.
4.2 During the duration of the Scheme Period, the ESOS Committee shall have the sole and absolute discretion in determining whether the Options are to be granted to the Eligible Person via –
(a) one single Offer at a time determined by the ESOS Committee; or
(b) several Offers where the vesting of the Options comprised in those Offers is staggered or made in several tranches at such times and on such terms and conditions as may be determined by the ESOS Committee.
4.3 An Eligible Person who is promoted to another category may be eligible to additional allocation (up to the difference between the maximum number of new SEB Shares that may be allotted and issued to each such Eligible Person under the previous category and the maximum number of new SEB Shares that may be offered under that new category) upon confirmation in the promoted category.
4.4 All allocation of Offers pursuant to the Scheme shall be verified at the end of each financial year of the Company by the Company’s audit committee and a statement verifying such allocation shall be included in SEB’s annual report.
5. ELIGIBILITY
5.1 Subject to the discretion of the ESOS Committee, any Senior Management or Executive Director of SEB Group shall be eligible to participate in the Scheme if, as at the Date of Offer, that person –
(a) has attained at least eighteen (18) years of age and is not an undischarged
bankrupt nor subject to any bankruptcy proceedings; (b) if he/she is a Senior Management, he/she is employed on a full time basis and
is on the payroll of any company in SEB Group, and his/her employment has been confirmed by such company in SEB Group ;
(c) if he/she is a Senior Management, he/she is serving in a specific designation under an employment contract for a fixed duration and has been in the employment of SEB Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;
(d) if he/she is an Executive Director, he/she has been serving SEB Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;
(e) if he/she is an Executive Director of the Company, the allocation of the Options granted to him/her in his/her capacity as an Executive Director of the Company under the Scheme has been approved by the shareholders of the Company at a general meeting; and
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(f) fulfils any other criteria or falls within such category as may be determined by the ESOS Committee at its absolute discretion for purposes of selecting an Eligible Person from time to time.
5.2 The ESOS Committee shall have the discretion to extend the benefit of this Scheme or otherwise to a Senior Management or an Executive Director in any of the following circumstances:
(a) A Senior Management or an Executive Director who is in employment of or serving a corporation which is not a Group Company but which subsequently becomes a Group Company as a result of restructuring, an acquisition, a merger, a divestment or other exercise involving the Company and/or any Group Company (“Previous Company”).
(b) An Senior Management or an Executive Director who was employed or was serving in a Previous Company and is subsequently transferred from that Previous Company to a Group Company.
(c) Where –
(i) a corporation that was a Group Company ceases to be a Group Company (“Ex-Group Company”); and
(ii) a Senior Management or an Executive Director of that Ex-Group Company is re-employed by another Group Company.
5.3 In the case where a Senior Management or an Executive Director is transferred, from a Group Company to a corporation that is not a Group Company, that Senior Management or Executive Director may, at the discretion of the ESOS Committee, continue to be entitled to all of his rights in respect of his unexercised Options.
5.4 Eligibility under the Scheme however, does not confer upon an Eligible Person a claim
or right to participate in the Scheme or any other rights whatsoever under the Scheme and an Eligible Person does not have any rights over or in connection with the Options or the new Shares comprised therein unless an Offer has been made in writing by the ESOS Committee to that Eligible Person and that Eligible Person has accepted the Offer in accordance with By-Law 7.
5.5 The selection of any Eligible Person to participate in the Scheme shall be at the discretion of the ESOS Committee whose decision shall be final and binding.
5.6 In addition to the above criteria of eligibility, any Foreign Employee / Grantee (including Executive Director) of SEB Group may be considered for participation in the Scheme.
6. OFFER
6.1 The ESOS Committee shall determine who shall participate in the Scheme and Offers shall be issued during the duration of the Scheme only to such Eligible Persons as the ESOS Committee shall determine in its absolute discretion.
6.2 The actual number of Options which may be offered to an Eligible Person shall be determined at the absolute discretion of the ESOS Committee and, subject to any adjustment that may be made under By-Law 18, shall not be less than one hundred (100) SEB Shares and shall always be in multiples of one hundred (100) SEB Shares.
6.3 The ESOS Committee shall be entitled to make more than one Offer to any Eligible Person.
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6.4 The Offer may be made upon such terms and conditions as the ESOS Committee may decide from time to time. The ESOS Committee shall decide in relation to an Offer, such terms and conditions including –
(a) the number of Options which are the subject of the Offer;
(b) the vesting date and vesting condition of the Offer;
(c) the Option Period; and
(d) such other condition which the ESOS Committee may determine from time to time in relation to that Offer.
6.5 Any Offer that has not been accepted in accordance with By-Law 7 shall become null and void, and incapable of acceptance upon –
(a) the death of the Eligible Person;
(b) the Eligible Person having received a letter of termination or ceasing to be an employee of any Group Company, for any reason whatsoever;
(c) the Eligible Person giving notice of his resignation from employment;
(d) the corporation which employs the Eligible Person ceases to be a Group Company; or
(e) the Eligible Person is subject to disciplinary proceedings.
6.6 Each Offer shall be made in writing and shall be sent to the Eligible Person as soon as reasonably practicable after the making of the Offer.
6.7 An Option is exercisable only by the Eligible Person personally during his lifetime whilst he is in the employment of any company in the Group and shall not be transferred, assigned, encumbered or otherwise disposed of in any manner whatsoever by the Eligible Person.
7. ACCEPTANCE OF OFFERS
7.1 An Offer shall be valid for a period of thirty (30) days from the Date of Offer or such longer period as may be determined by the ESOS Committee on a case to case basis, at its absolute discretion. The acceptance of an Offer shall be made by way of a written notice from the Eligible Person to the ESOS Committee in the form prescribed by the ESOS Committee and shall be accompanied by the payment of RM1.00 (Ringgit Malaysia One) as non-refundable consideration for the Option.
7.2 In the event that the Eligible Person fails to accept the Offer or pay the acceptance consideration within the prescribed period and in the manner aforestated, the Offer shall automatically lapse and be null and void.
8. OPTION EXERCISE PRICE
The Option Exercise Price shall be determined by the Board upon recommendation of the ESOS Committee based on the five (5) day WAMP of SEB Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer with a discount of not more than ten percent (10%) or such other percentage of discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the Scheme.
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9. EXERCISE OF OPTIONS
9.1 An Option can be exercised by the Grantee by notice in writing to the Company during the Option Period in respect of all or any number of the SEB Shares comprised in the Option, such part being in multiples of one hundred (100) SEB Shares. Any partial exercise of an Option shall not preclude the Grantee from exercising the Option in respect of the balance of the SEB Shares comprised in the Option.
9.2 In order to exercise an Option in whole or in part, the Grantee (or as the case may be, his personal representatives) must deliver to the ESOS Committee a written notice in such form as the ESOS Committee may from time to time prescribe provided that such delivery of a written notice is only done on such dates as may be communicated by the ESOS Committee to all Eligible Person. Any such notice shall state the number of SEB Shares in respect of which the Option is being exercised, which number –
(a) shall not exceed the number of SEB Shares or the remaining number of SEB Shares comprised in the Option, as the case may be;
(b) shall not exceed the maximum number of SEB Shares in respect of which the Grantee may subscribe in every year;
(c) shall not be less than 100 SEB Shares; and
(d) shall be in the multiple of 100 SEB Shares.
9.3 The notice shall be accompanied by payment in full of the Option Exercise Price for the number of new SEB Shares in respect of which the Option is exercised.
9.4 In the event of an Option being exercised in part only, the balance of the Option not thereby exercised shall continue to be exercisable in accordance with the provisions hereof until the expiry of the Option Period.
9.5 As soon as practicable and in any event within eight (8) Market Days (or such period as may be prescribed under the Listing Requirements) from the date on which the ESOS Committee is in receipt from the Grantee of the aforesaid notice and payment of the Option Exercise Price, the Company shall allot and issue to the Grantee the new SEB Shares in respect of which the Option has been exercised, despatch to the Grantee the notice of allotment and issuance thereof and make an application for the quotation of such new SEB Shares.
9.6 A Grantee who exercises his Option shall provide the ESOS Committee with his CDS Account number in the notice referred to in By-Law 9.2. The new SEB Shares to be issued pursuant to the exercise of an Option will be credited directly into the CDS account of the Grantee and a notice of allotment and issuance stating the number of new SEB Shares credited into the CDS Account will be issued to the Grantee and no physical share certificate will be issued.
9.7 All Options to the extent unexercised on the expiry of the Option Period shall lapse.
9.8 The Company, the Board and the ESOS Committee shall not under any circumstances be held liable to any person for any costs, losses, expenses, damages or liabilities howsoever arising in the event of any delay on the part of the Company in procuring the Bursa Securities to list the SEB Shares subscribed for by a Grantee.
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10. RETENTION PERIOD
The Grantee must not sell, transfer or assign any new SEB Shares obtained through the exercise of Options offered to him/her under the Scheme within three (3) years from the Date of Offer.
11. RANKING OF NEW SEB SHARES
The new SEB Shares to be allotted and issued upon exercise of the Options shall, upon allotment and issue rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the Entitlement Date is before the date of allotment of the new SEB Shares.
12. TERMINATION OF THE OPTION
12.1 In the event of the cessation of employment of a Grantee with the SEB Group or cessation of the Grantee as an Executive Director of SEB Group or where the Grantee otherwise ceases to be an Eligible Person (as the case may be) for whatever reason prior to the full exercise of an Option, such Option or the unexercised balance thereof, as the case may be, shall forthwith cease to be valid without any claim against the Company unless otherwise determined by the ESOS Committee in its absolute discretion if such cessation occurs by reason of –
(a) retirement on attaining the retirement age under the Group’s terms and conditions of employment;
(b) retirement before attaining the normal retirement age;
(c) resignation or termination due to ill-health, injury, physical or mental disability;
(d) redundancy or retrenchment under a voluntary separation scheme;
(e) non-renewal of fixed term contract; or
(f) any other circumstances which are acceptable to ESOS Committee,
such Option shall remain exercisable during the Option Period.
12.2 Application for the written approval of the ESOS Committee shall be made –
(a) in a case where By-Laws 12.1(a), (b) or (e) is applicable, before the Grantee’s last day of employment; or
(b) in a case where By-Law 12.1(c) is applicable, within one (1) month after the Grantee notifies his employer of his resignation due to ill health, injury or disability; or
(c) in a case where By-Law 12.1(d) is applicable, within one (1) month after the Grantee’s acceptance of the offer of a voluntary separation scheme,
failing which, any Options held by the Grantee shall be automatically terminated.
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12.3 The ESOS Committee shall consider applications under By-Law 12.2 on a case-by-case basis and may in its absolute discretion approve or reject any application in whole or in part without giving any reasons therefore and may impose any terms and conditions in granting an approval. The decision of the ESOS Committee shall be final and binding. In the event that the ESOS Committee approves an application in whole or in part, the Grantee may exercise the Options which are the subject of the approval within the period so approved by the ESOS Committee. Any Options in respect of which an application is rejected shall be automatically terminated on the date of termination stipulated in the relevant paragraph of By-Law 12.2 or on the date of the ESOS Committee’s decision, whichever is the later.
12.4 In the event that the ESOS Committee receives an application under By-Law 12.2 after the expiry of the relevant period under By-Law 12.2, the ESOS Committee may in its absolute discretion consider the application taking into account the reasons given by the Grantee for the delay in making the application. In the event that the ESOS Committee approves the application in whole or in part, the Company shall make an Offer in respect of the Options which are the subject of the approval to the Grantee and such Options shall be exercisable –
(a) only within the Option Period of those Options which were terminated due to the Grantee’s delay in making the application;
(b) in accordance with the provision of By-Laws as applicable in respect of such terminated Options; and
(c) at the Option Exercise Price applicable in respect of such terminated Options.
12.5 Any Option which lapses upon the cessation of employment of a Grantee with the SEB Group, may, at the discretion of the ESOS Committee, be re-allotted and re-issued to other Eligible Person.
12.6 In the event of the liquidation of the Company, all unexercised or partially exercised Options shall lapse.
13. DIVESTMENT FROM THE GROUP
If a Grantee who was in the employment of a company in the Group which was subsequently divested wholly, or in part, from the Group such that the company is no longer a Relevant Subsidiary, then such Grantee will not be eligible to participate for further Options under the Scheme. Unless decided otherwise by the ESOS Committee, all such unexercised Option(s) which were granted to him under the Scheme together with the right of such Grantee to subscribe for that number of new SEB Shares or any part thereof granted under such unexercised Options shall automatically lapse and be null and void.
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14. ACQUISITION OF SUBSIDIARIES
Notwithstanding anything to the contrary, a Senior Management or an Executive Director who is in employment of a Previous Company (“Affected Employee”) –
(a) will be entitled to continue to exercise all such unexercised rights or options that were granted to him under the Previous Company’s employee share scheme or employee share option scheme in accordance with the by-laws of that Previous Company’s employee share scheme or employee share option scheme, but he shall not, upon that Previous Company becoming a Group Company, be eligible to participate for furtherrights or options under such Previous Company’s employee share scheme or employee share option scheme unless permitted by the ESOS Committee; and
(b) subject to the approval of the ESOS Committee, may be eligible to participate in this Scheme.
15. TAKEOVER
15.1 Notwithstanding By-Laws 9 and 23 and subject to the provisions of any applicable statutes, rules, regulations or conditions issued by the relevant authorities, in the event –
(a) a take-over offer is made for the Company to acquire the whole of the issued ordinary share capital of the Company (or such part thereof not at the time held by the person making the general offer (“Offeror”) or any persons acting in concert with the Offeror) and such offer becoming or being declared unconditional, a Grantee who is holding outstanding exercisable Options shall be entitled within thirty (30) days from the date on which such offer becomes or is declared unconditional, to exercise all or any part of the Grantee’s Options to which he/she is then entitled; and
(b) the Offeror becoming entitled or bound to exercise the right of compulsory acquisition of the SEB Shares under the provisions of any applicable statutes, rules and/or regulations and gives notice to each Grantee that it intends to exercise such right on a specific date (“Specific Date”), a Grantee who is holding outstanding exercisable Options will be entitled to exercise all or any part of the Grantee’s Options from the date of service of the said notice to the Grantee until the expiry of such Specific Date.
15.2 In the foregoing circumstances, if the Grantee fails to exercise his Options or elects to exercise only in respect of a portion of such SEB Shares, then any Options to the extent unexercised by the expiry of the periods stipulated in the aforesaid circumstances shall automatically lapse and be null and void.
16. SCHEME OF ARRANGEMENT, AMALGAMATION, AND RECONSTRUCTION
Notwithstanding By-Law 9, if under Section 366 of the Act, the Court sanctions a compromise or arrangement proposed for the purpose of or in connection with a scheme for the reconstruction of the Company, or its amalgamation with any other company under Section 370of the Act notice thereof shall be given by the Company and the ESOS Committee may permit the exercise of any unexercised Option by the Grantee or (as the case may be) his personal representatives, subject to such terms and conditions as may be prescribed by the ESOS Committee.
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17. LIQUIDATION OF THE COMPANY
On the liquidation of the Company, all or any part of the unexercised Option shall automatically lapse and become null and void and of no further force and effect.
18. ALTERATION TO SHARE CAPITAL DURING THE OPTION PERIOD
18.1 Subject to the Listing Requirements, policies or guidelines of the Bursa Securities or any other relevant regulatory authority (where applicable), in the event of any alteration in the capital structure of the Company during the duration of the Scheme, whether by way of capitalisation of profits or reserves, rights issue, bonus issue, reduction, subdivision or consolidation of capital or any other variations of capital, the ESOS Committee shall have the discretion, in accordance with the provision of the By-Laws, to make adjustments to –
(a) the Option Exercise Price;
(b) the number of SEB Shares comprised in the Option or any portion thereof which have not been exercised; and/or
(c) the number of new SEB Shares and/or Option Exercise Price comprised in an Offer which is open for acceptance (if such Offer is subsequently accepted in accordance with the terms of the Offer and the Scheme),
in such manner as the ESOS Committee may consider appropriate and, upon any adjustment being made pursuant to this By-Law, the ESOS Committee shall notify the Grantee in writing within thirty (30) days upon the last approvals being obtained from the relevant parties/authorities of the adjusted Option Exercise Price and/or the adjusted number of shares comprised in the Option.
18.2 Save for a bonus issue, subdivision or consolidation of Shares, adjustments made pursuant to By-Law 18.1 must be confirmed in writing by the external auditors of the Company for the time being (acting as experts and not as arbitrators) or the Adviser upon reference to them by the ESOS Committee, to be in their opinion, fair and reasonable.
18.3 Notwithstanding the generality of the provisions of By-Law 18.1, the following provisions shall apply in relation to an adjustment which is made pursuant to By-Law 18.1:
(a) Any adjustment to the Option Exercise Price shall be rounded up to the nearest one (1) sen.
(b) In determining a Grantee’s entitlement to subscribe for SEB Shares, any fractional entitlements will be disregarded.
18.4 The adjustment pursuant to this By-Law 18 shall be made in accordance with the formulas as set out in the Schedule attached to these By-Laws and on the day immediately following the entitlement date/books closure date for the event giving rise to the adjustment.
18.5 The provisions of this By-Law 18 shall not apply where the alteration in the capital structure of the Company arises from the following:
(a) An issue of new SEB Shares or other securities convertible into new SEB Shares or with rights to acquire or subscribe for SEB Shares in consideration or part consideration for an acquisition of any other securities, assets or business.
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(b) A special issue of new SEB Shares to Bumiputera parties nominated by the Ministry of International Trade and Industry, Malaysia and/or other government authorities to comply with the Government policy on Bumiputera capital participation.
(c) A private placement of new SEB Shares by the Company.
(d) A share buy-back arrangement by the Company pursuant to Section 127 of the Act.
(e) An issue of new SEB Shares arising from the exercise of any conversion rights attached to securities convertible to SEB Shares or upon exercise of any other rights including warrants (if any) issued by the Company.
(f) An issue of new SEB Shares upon the exercise of Options pursuant to the Scheme.
18.6 However, in the event the Company purchases its own shares and resolves to cancel all or part of the shares so purchased, thereby diminishing its issued and paid-up share capital, the Options granted prior to the adjustment of its issued and paid-up share capital shall remain valid and exercisable in accordance with the terms and conditions of these By-Laws. If the aggregate of the number of SEB Shares comprised in such Options is greater than the Maximum Shares, the ESOS Committee shall not make any further Offers.
19. QUOTATION OF SHARES
If at the time of the allotment and issuance of the new SEB Shares pursuant to the exercise of the Option, the existing SEB Shares are quoted on Bursa Securities, the Company shall make an application to Bursa Securities for its permission to deal in and for quotation of the new SEB Shares so allotted and issued.
20. ADMINISTRATION
20.1 The Scheme shall be administered by the ESOS Committee consisting of such persons appointed by the Board from time to time.
20.2 The ESOS Committee shall administer the Scheme in such manner as it shall in its discretion deem fit. For the purpose of administering the Scheme, the ESOS Committee may do all such acts and things and enter into any transactions, agreements, deeds, documents or arrangements, and make rules, regulations or impose terms and conditions or delegate part of its power relating to the Scheme, as the ESOS Committee may in its absolute discretion deem fit.
20.3 The Board shall have power from time to time to –
(a) approve, rescind or revoke the appointment of any person to the ESOS Committee as it shall deem fit; and
(b) assume or exercise any of the powers and authorities conferred upon the ESOS Committee pursuant to these By-Laws.
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21. DISCIPLINARY PROCEEDINGS
21.1 In the event an Eligible Person is subjected to disciplinary proceedings (whether or not such disciplinary proceedings will give rise to a dismissal or termination of service), the right of the Eligible person to exercise any unexercised Option shall be suspended pending the outcome of the disciplinary proceedings unless decided otherwise by the ESOS Committee who may in so doing, impose such terms and conditions as it deems appropriate having regard to the nature of the disciplinary actions made or broughtagainst the Eligible Person. In the event the Eligible Person is found guilty resulting in the dismissal or termination of service, the Option shall immediately lapse without notice upon pronouncement of the dismissal or termination of service.
21.2 Nothing herein shall prevent the ESOS Committee from making a new Offer or reinstating the right of the Eligible Person to exercise any unexercised Option in the event that such disciplinary action is not decided against him or if such disciplinary action is withdrawn provided that such Offer or reinstatement is made within the Scheme Period. If the ESOS Committee does not reinstate the right of the Eligible Person prior to the expiry of the Scheme Period, the Offer and acceptance thereof shall automatically lapse and be null and void.
22. AMENDMENT AND/OR MODIFICATION TO THE SCHEME
22.1 Subject to compliance with the Listing Requirements and the approval of any other authorities, the ESOS Committee may from time to time recommend to the Board any additions, modifications and amendments to or deletions of these By-Laws as it shall in its discretion think fit.
22.2 The approval of the shareholders of the Company in a general meeting shall not be required in respect of additions or amendments to or deletions of these By-Laws provided that no additions, amendments or deletions shall be made to these By-Laws which would –
(a) prejudice any rights which would have accrued to any Grantee without his/her prior consent; or
(b) increase the number of Shares to be issued pursuant to the exercise of the Options available under the Scheme beyond the Maximum Shares; or
(c) alter any matter which are required to be contained in these By-Laws by virtue of the Listing Requirements to the advantage of the Eligible Person or Grantee.
22.3 The Grantee shall be given written notice of any additions or amendments to or deletion of these By-Laws within fourteen (14) days of any of the foregoing taking effect.
23. DURATION OF THE SCHEME
23.1 The Scheme shall be in force for a duration of seven (7) years from the Effective Date.
23.2 The Scheme shall come in force on the date to be determined by the ESOS Committee following full compliance with the following relevant requirements prescribed under the Listing Requirements of Bursa Securities (“Effective Date”):
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(a) Approval of Bursa Securities for the listing of the new Shares to be issued pursuant to the exercise of the Options being obtained.
(b) Approval of the shareholders of the Company for the Scheme at an extraordinary general meeting (“EGM”) being obtained.
(c) Submission to Bursa Securities of the final copy of the By-Laws together with a letter of compliance pursuant to Paragraph 2.12 of the Listing Requirements and a checklist showing compliance with Appendix 6E of the Listing Requirements (and/or such other documents as may be determined by Bursa Securities from time to time).
(d) Approval of any other relevant authorities, where applicable, being obtained.
(e) Fulfillment or waiver (as the case may be) of all applicable conditions attached to the above approvals (if any).
23.3 The Adviser of the Company shall submit a confirmation letter to Bursa Securities of full compliance with relevant requirements of the Listing Requirements of Bursa Securities stating the effective date of implementation of the Scheme together with a true copy of a resolution passed by the shareholders of the Company in general meeting. The confirmation letter shall be submitted to Bursa Securities no later than five (5) Market Days after the Effective Date.
23.4 Offers can only be made during and not after the duration of the Scheme.
23.5 Subject to a notice period of at least thirty (30) days being provided, and in compliance with the existing guidelines or directives of Bursa Securities or any other regulatory authorities, the Scheme may be terminated by the ESOS Committee at any time during the Scheme Period and the Company shall make an announcement immediately through Bursa Securities. The announcement shall include –
(a) the effective date of termination;
(b) the number of Options exercised and/or vested; and
(c) the reason for termination.
23.6 Upon the termination of the Scheme –
(a) no further Offers shall be made by the ESOS Committee from the date of such termination;
(b) all Offers which have yet to be accepted shall automatically lapse on the date of such termination; and
(c) all outstanding Offers shall be automatically terminated on the date of such termination.
24. DISPUTES
In the event of any dispute between the Board or ESOS Committee and an Eligible Person or Grantee, as to any matter or thing of any nature arising hereunder, the Board or ESOS Committee shall determine such dispute or difference by a written decision (without the obligation to give any reason for the same) given to the Eligible Person or Grantee, as the case may be. The said decision of the Board or ESOS Committee shall be final and binding on the parties.
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25. COMPENSATION
25.1 Participation in the Scheme by a Grantee is a matter entirely separate from any right or entitlement the Grantee may have and from his terms and conditions of employment by SEB Group and participation in the Scheme shall in no respect whatsoever affect in any way a Grantee’s rights or entitlement or terms or conditions of the employment. In particular (but without limiting the generality of the foregoing words), any Grantee who leaves the employment with SEB Group shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Scheme which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or breach of contract or by way of compensation for loss of office or otherwise howsoever.
25.2 No Eligible Person or Grantee or legal personal representatives shall be entitled to bring any claim, action or proceedings against the Company or the ESOS Committee or any other party for compensation, loss or damages whatsoever and howsoever arising from the suspension of his rights to exercise his Option or his Option ceasing to be valid pursuant to the provisions of these By-Laws.
26. INSPECTION OF AUDITED ACCOUNTS
All Grantees shall be entitled to inspect a copy of the latest audited accounts of the Company, which shall be made available at the Company’s website, www.sapuraenergy.com.
27. COST AND EXPENSES
The Company shall bear all costs of and incidental to the setting-up and administration of the Scheme. Any expenses reasonably incurred by the Company in any issuance of shares in the name of the Grantee or his personal representatives or nominees shall also be payable by the Company save and except for any taxes (including income tax) which shall be borne by the Grantee.
28. SCHEME NOT A TERM OF EMPLOYMENT
This Scheme does not form part nor shall it in any way be construed as part of the terms and conditions of employment of any employee.
29. CONSTITUTION
Notwithstanding the terms and conditions contained in these By-Laws, if a situation of conflict should arise between these By-Laws and the Constitution of the Company, the provisions of the Constitution of the Company shall prevail at all times.
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30. NOTICES
30.1 Any notice or request which the Company is required to give, or may desire to give, to any Eligible Person or the Grantee pursuant to the Scheme shall be in writing and shall be deemed to be sufficiently given –
(a) if it is sent by prepaid registered post by the Company to the Eligible Person or the Grantee at the last address known to the Company as being his address and such notice or request shall be deemed to have been received at the time when it would in the ordinary course of post be delivered; or
(b) if it is given by hand to the Eligible Person or the Grantee.
Any change of address of the Eligible Person or the Grantee shall be communicated in writing to the Company and the ESOS Committee.
30.2 Any notification or other notice required to be given to the Company or the ESOS Committee shall be properly given if sent by Advice of Receipt registered post or delivered by hand to the Company at its registered address at Sapura@Mines, No.7, Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan.
31. SEVERABILITY
Any term, condition, stipulation, or provision in these By-Laws which is illegal, void or unenforceable shall be ineffective to the extent of such illegality, voidness or unenforceability, but the same shall not invalidate or render illegal, void or unenforceable any other term, condition, stipulation or provision contained in these By-Laws.
32. ERRORS AND OMMISSIONS
If as a consequence of an error or omission, the ESOS Committee discovers or determines that the number of SEB Shares allotted and issued to any Grantee on any occasion is found to be incorrect and such errors or omission cannot be corrected, the ESOS Committee may do all such acts and things to rectify such error or omission including but not limited to ensure that the Granted is credited with the correct number of SEB Shares to which he is entitled.
33. GOVERNING LAW
The Scheme, these By-Laws, the Offers made and Options granted and actions taken under this Scheme shall be governed and construed in accordance with laws of Malaysia and the Grantee, by accepting the Offer, irrevocably submit to the exclusive jurisdiction of the courts of Malaysia.
34. DECISION OF THE BOARD AND ESOS COMMITTEE
Any decision or determination by the Board and the ESOS Committee under these By-Laws shall be final and binding on all parties.
35. DELAY IN PERFORMANCE
The performance of any obligations provided herein may be delayed, prohibited or become impossible by reason of events beyond reasonable control of the Company or the ESOS Committee.
176
177
APPENDIX III
DRAFT BY-LAWS (Cont’d)
163
then in respect of each such case, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:
C - DC
and in respect of the case referred to in this paragraph 2(b), the additional number of Options held by each Grantee shall be adjusted in accordance with the following formula:
Number of additional Options =
T x C - T C-D*
where:
T = existing number of Options;
C = the Current Market Price (as defined in paragraph 7 below) of each SEB Share on the Market Day immediately preceding the date on which the Capital Distribution or, as the case may be, the offer or invitation is publicly announced to Bursa Securities or (failing any such announcement), immediately preceding the date of the Capital Distribution or, as the case may be, of the offer or invitation; and
D = (1) in the case of an offer or invitation to acquire or subscribe for SEB Shares by way of rights under paragraph 2(b) above or for securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares under paragraph 2(c) above, the value of the rights attributable to one (1) SEB Share (as defined below); or
(2) in the case of any other transaction falling within this paragraph 2
hereof, the fair market value, as determined (with the concurrence of the external auditors and/or the Approved Adviser) of that portion of the Capital Distribution attributable to one (1) SEB Share.
For the purpose of paragraph (1) of D above “the value of the rights attributable to one (1) SEB Share” shall be calculated in accordance with the formula:
C - EF + 1
where:
C = as C above
E = the Option Exercise Price for one (1) additional SEB Share under the terms of such offer or invitation or one (1) additional security convertible into SEB Shares or one (1) additional security with rights to acquire or subscribe for SEB Shares;
F = the number of SEB Shares which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional SEB Share or security convertible into SEB Shares or one (1) additional security with rights to acquire or subscribe for SEB Shares; and
D*= the value of the rights attributable to one (1) SEB Share (as defined below).
178
APPENDIX III
DRAFT BY-LAWS (Cont’d)
164
For the purpose of definition D* above, the “value of the rights attributable to one (1) SEB Share” shall be calculated in accordance with the formula:
C - E*F* + 1
where:
C = as C above;
E* = the Option Exercise Price for one (1) additional SEB Share under the terms of any such offer or invitation; and
F*= the number of SEB Shares which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional SEB Share.
For the purpose of this paragraph 2 “Capital Distribution” shall (without prejudice to the generality of that expression) include a capital reduction pursuant to Sections 116 and 117 of the Act and distributions in cash or specie or by way of issue of SEB Shares (not falling under paragraph 1 hereof) or other securities credited as fully or partly paid-up by way of capitalisation of profits or reserves (whether of a capital or income nature and including any share premium account or capital redemption reserve fund, if applicable).
Any dividend declared or provided for by the Company in the accounts of any period shall (whenever paid and howsoever described) be deemed to be a Capital Distribution unless the aggregate dividends declared or provided for the financial year is less than ten percent (10%) of the nominal value of the SEB Shares.
Any dividend charged or provided for in the accounts of any period shall (whenever paid and howsoever described) be deemed to be a Capital Distribution unless it is paid out of the aggregate of the net profits attributable to the Company shareholders for any period as shown in the audited consolidated financial statements of SEB.
Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.
3. If and whenever the Company make any allotment to its ordinary shareholders as
provided in paragraph 1 above and also makes any offer or invitation to its shareholders as provided in paragraph 2(b) or paragraph 2(c) and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:
(G x C) + (H x I)(G + H + B) x C
and where the Company makes any allotment to its ordinary shareholders as provided in paragraph 1 above and also makes any offer or invitation to its ordinary shareholders as provided in paragraphs 2(b) or 2(c) above and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the additional number of Options which are held by each Grantee, shall be adjusted in accordance with the following formula:
Number of additional Options = T x (G + H*) x C - T (G x C) + (H* x I*)
179
APPENDIX III
DRAFT BY-LAWS (Cont’d)
165
where:
G = the aggregate number of issued and fully paid-up SEB Shares on the entitlement date;
B = as B above;
C = as C above;
H = the aggregate number of new SEB Shares under an offer or invitation to acquire or subscribe for SEB Shares by way of rights or under an offer or invitation by way of rights to acquire or subscribe for securities convertible into SEB Shares of rights to acquire or subscribe for SEB Shares as the case may be;
H*= the aggregate number of new SEB Shares under an offer or invitation toacquire or subscribe for SEB Shares by way of rights;
I = the Option Exercise Price of one (1) additional SEB Shares under the offer or invitation to acquire or subscribe for SEB Shares or the exercise price on conversion of such securities or exercise of such rights to acquire or subscribe for one (1) additional SEB Share, as the case may be;
I*= the Option Exercise Price of one (1) additional SEB Share under the offer or invitation to acquire or subscribe for SEB Shares; and
T = as T above.
Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.
4. If and whenever the Company makes any offer or invitation to its ordinary shareholders to acquire or subscribe for SEB Shares as provided in paragraph 2(b) above together with an offer or invitation to acquire or subscribe for securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares as provided in paragraph 2(c), the Option Exercise Price shall be adjusted by multiplying it by the following fraction:
(G x C) + (H x I) + (J x K)(G + H + J) x C
and the additional number of Options which are held by each Grantee, shall be adjusted in accordance with the following formula:
Number of additional Options = T x (G + H*) x C - T (G x C) + (H* x I*)
where:
C = as C above;
G = as G above;
H = as H above;
H*= as H* above;
180
APPENDIX III
DRAFT BY-LAWS (Cont’d)
166
I = as I above;
I*= as I* above;
J = the aggregate number of SEB Shares to be issued to its ordinary shareholders upon conversion of such securities or exercise of such rights to subscribe for SEB Shares by the ordinary shareholders;
K = the exercise price on conversion of such securities or exercise of such rights to acquire or subscribe for (1) additional SEB Share; and
T = as T above.
Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.
5. If and whenever the Company makes an allotment to its ordinary shareholders as provided in paragraph 1 above and also makes an offer or invitation to acquire or subscribe for SEB Shares to its ordinary shareholders as provided in paragraph 2(b) above together with rights to acquire or subscribe for securities convertible into or with rights to acquire or subscribe for SEB Shares as provided in paragraph 2(c) above and the entitlement date for the purpose of the allotment and issuance is also the entitlement date for the purpose of the offer or invitation, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:
(G x C) + (H x I) + (J x K)(G + H + J + B) x C
and the additional number of Option which a Grantee may be entitled to be issued with, shall be adjusted in accordance with the following formula:
Number of additional Options = T x (G + H* + B) x C - T (G x C) + (H* x I*)
where:
B = as B above;
C = as C above;
G = as G above;
H = as H above;
H*= as H* above;
I = as I above;
I*= as I* above;
J = as J above;
K = as K above; and
T = as T above. Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.
181
APPENDIX III
DRAFT BY-LAWS (Cont’d)
167
6. If and whenever (otherwise than pursuant to a rights issue available to all ordinary shareholders and requiring an adjustment under paragraphs 2(b), 2(c), 3, 4 or 5 above, the Company shall issue either any SEB Shares or any securities convertible into SEB Shares or with rights to acquire or subscribe for SEB Shares, and in any such case, the Total Effective Consideration per SEB Share (as defined below) is less than ninety percent (90%) of the Average Price for one (1) SEB Share (as defined below) or, as the case may be, the price at which SEB Shares will be issued upon conversion of such securities or exercise of such rights is determined, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:
L + ML + N
where:
L = the number of SEB Shares in issue at the close of business on the Market Day immediately preceding the date on which the relevant adjustment becomes effective;
M = the number of SEB Shares which the Total Effective Consideration (as defined below) would have purchased at the Average Price (as defined below) (exclusive of expenses); and
N = the aggregate number of SEB Shares so issued or, in the case of securities convertible into SEB Shares or with rights to acquire or subscribe for SEB Shares, the maximum number (assuming no adjustment of such rights) of SEB Shares issuable upon full conversion of such securities or the exercise in full of such rights.
For the purposes of this paragraph 6, the “Total Effective Consideration” shall be determined by the Board with the concurrence of an auditor and/or the ApprovedAdviser and shall be:
(1) in the case of the issue of SEB Shares, the aggregate consideration receivable by the Company on payment in full for such SEB Shares; or
(2) in the case of the issue by the Company of securities wholly or partly convertible into SEB Shares the aggregate consideration receivable by the Company on payment in full for such securities or such part of the securities as is convertible together with the total amount receivable by the Company upon full conversion of such securities (if any); or
(3) in the case of the issue by the Company of securities with rights to acquire or subscribe for SEB Shares, the aggregate consideration attributable to the issue of such rights together with the total amount receivable by the Company upon full exercise of such rights.
In each case without any deduction of any commissions, discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the “Total Effective Consideration per SEB Share” shall be the Total Effective Consideration divided by the number of SEB Shares issued as aforesaid or, in the case of securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares, by the maximum number or SEB Shares issuable on full conversion of such securities or on exercise in full of such rights.
182
APPENDIX III
DRAFT BY-LAWS (Cont’d)
168
For the purpose of paragraph 6, the “Average Price” of a SEB Share shall be the average price of one (1) SEB Share as derived from the last dealt prices for one (1) or more board lots of the SEB Shares as quoted on Bursa Securities on the Market Days comprised in the period used as a basis upon which the issue price of such SEB Shares is determined.
Each such adjustment will be calculated (if appropriate retroactively) from the close of business of the next Market Day following the date on which the issue is announced, or (failing any such announcement) on the next Market Day following the date on which the Company determines the Option Exercise Price of such SEB Shares.
Each such adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the completion of the above transaction.
7. For the purposes of paragraphs 2, 3, 4 and 5 above, the “Current Market Price” in relation to one (1) SEB Share for any relevant day shall be the average of the last dealt prices for the five (5) consecutive Market Days before such date or during such other period as may be determined in accordance with any guidelines issued, from time to time, by Bursa Securities.
(ii) Whenever there is an adjustment as herein provided, the Company shall give notice to holders of Options that the Option Exercise Price and/or the number of Options held by each Grantee has been adjusted and setting forth the event giving rise to the adjustment, the Option Exercise Price and/or the number of Option Shares held in effect prior to such adjustment, the adjusted Option Exercise Price and/or the adjusted number of Options held and the Effective Date thereof shall, at all times thereafter so long as the Options remain exercisable make available for inspection at its registered office a signed copy of the certificate of the external auditors or the Approved Adviser certifying the adjustment to the Option Exercise Price and/or the number of Options held and a certificate signed by a director setting forth brief particulars of the event giving rise to the adjustment, the Option Exercise Price and/or the number of Options held in effect prior to such adjustment, the adjusted Option Exercise Price and/or the adjusted number of Options held and the Effective Date thereof and shall, on request, send a copy thereof to any holder of Options.
(iii) Notwithstanding the provision referred to in this Schedule and By-Law 18, in any circumstances where the Board consider that adjustments provided under the said provisions should not be made or should be calculated on a different basis or that an adjustment should be made notwithstanding that no such adjustment is required under the said provisions, the Company may appoint the Approved Adviser and/or the external auditors, to consider whether for any reason whatsoever the adjustments to be made (or the absence of any adjustment) or the adjustments to be made in accordance with these By-Laws is appropriate or inappropriate, as the case may be, and if such Approved Adviser and/or the external auditors shall consider the adjustment to be inappropriate, the adjustment shall be modified or nullified or any adjustment made in such manner as shall be considered by such Approved Adviser and/or the external auditors to be in its opinion appropriate and in accordance with the terms of this Scheme.
(iv) All adjustments (other than those made pursuant to bonus issue, subdivision or consolidation of shares) must be confirmed in writing either by the external auditors of the Company or the Approved Adviser for the time being, acting as an expert and not as an arbitrator. In addition, the Company shall, at the request of any Grantee, furnish such Grantee with a certificate from either an approved company auditor or the Approved Adviser confirming the adjustment, and such certification shall be final and binding on all parties. For the purpose of this Schedule, an approved company auditor shall have the meaning given in section 263 of the Act.
183
APPENDIX IV
SUMMARY INFORMATION ON THE LTIP
169
Commencement date : 1 December 2014
Duration of the scheme : Seven (7) years
Expiry date : 30 November 2021
Eligible grantees : A person who fulfils the following criteria as at the date of the offer shall be eligible to be considered an eligible employee:
(i) has attained the age of 18 years;
(ii) has entered into a full-time or fixed-term contract of employment with, and is on the payroll of our Company or any subsidiary of our Company which is not dormant and include such subsidiaries which are existing as at the effective date of the LTIP and those subsequently acquired or incorporated at any time during the LTIP period;
(iii) whose service has been confirmed in writing;
(iv) is not a non-executive or independent director of our Company; and
(v) has fulfilled any other eligibility criteria which has been determined by the LTIP committee in its discretion, as the case may be.
Maximum number of SEB Shares which may be issued under the scheme
: Up to five percent (5%) of the issued ordinary share capital of SEB at any point in time
Number of SEB Shares granted
: As at the LPD, our Company has not granted any new SEB Shares pursuant to the LTIP
Maximum allocation to senior management and/or Executive Directors
: Save for the allocation to the Executive Directors of 2.4%, there was no maximum allocation to the senior management of our Company.As at the LPD, our Company has not granted any new SEB Shares to the senior management and Executive Directors pursuant to the LTIP
Actual allocation to senior management and/or Executive Directors
: As at the LPD, our Company has not granted any new SEB Shares pursuant to the LTIP
184
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N
170
Our
Con
stitu
tion
shal
l be
alte
red,
mod
ified
or a
men
ded
in th
e fo
llow
ing
man
ner:
CLA
USE
/A
RTI
CLE
SEX
ISTI
NG
PR
OVI
SIO
NS
AM
END
ED P
RO
VISI
ON
S
To d
elet
e C
laus
e 6
of
the
Mem
oran
dum
of
Asso
ciat
ion
“The
cap
ital
of t
he C
ompa
ny i
s R
M10
,000
,000
,000
.00
divi
ded
into
10
,000
,000
,000
sh
ares
of
R
M1.
00 e
ach.
The
sha
res
in th
e or
igin
al o
r an
y in
crea
sed
capi
tal
may
be
di
vide
d in
to
seve
ral
clas
ses
and
ther
e m
ay
be
atta
ched
ther
eto
resp
ectiv
ely
any
pref
eren
tial,
defe
rred
or
ot
her
spec
ial
right
s,
priv
ilege
s,
cond
ition
s or
res
trict
ions
as
to
divi
dend
s,
capi
tal,
votin
g or
ot
herw
ise.
”
Del
eted
To
amen
d C
laus
e 7
of t
he
Mem
oran
dum
of
Asso
ciat
ion
“Sub
ject
alw
ays
to th
e re
spec
tive
right
s,
term
s an
d co
nditi
ons
men
tione
d in
Cla
use
6 he
reof
the
Com
pany
sha
ll ha
ve p
ower
to
incr
ease
or r
educ
e th
e ca
pita
l, to
co
nsol
idat
e or
su
b-di
vide
th
e sh
ares
int
o sh
ares
of
larg
er o
r sm
alle
r am
ount
s an
d to
issu
e al
l or
any
par
t of t
he o
rigin
al o
r an
y ad
ditio
nal c
apita
l as
fully
pai
d or
pa
rtly
paid
sha
res,
and
with
any
sp
ecia
l or
pre
fere
ntia
l rig
hts
or
priv
ilege
s,
or
subj
ect
to
any
spec
ial
term
s or
con
ditio
ns a
nd
eith
er w
ith o
r with
out a
ny s
peci
al
desi
gnat
ion,
and
als
o fro
m t
ime
to t
ime
alte
r, m
odify
, co
mm
ute,
ab
roga
te o
r de
al w
ith a
ny s
uch
right
s,
priv
ilege
s,
term
s,
“The
Com
pany
sha
ll ha
ve p
ower
to in
crea
se o
r red
uce
the
capi
tal,
to c
onso
lidat
e or
sub
-div
ide
the
shar
es
into
sha
res
of la
rger
or s
mal
ler a
mou
nts
and
to is
sue
all o
r any
par
t of t
he o
rigin
al o
r any
add
ition
al c
apita
l as
fully
pai
d or
par
tly p
aid
shar
es, a
nd w
ith a
ny s
peci
al o
r pre
fere
ntia
l rig
hts
or p
rivile
ges,
or s
ubje
ct to
an
y sp
ecia
l ter
ms
or c
ondi
tions
and
eith
er w
ith o
r with
out a
ny s
peci
al d
esig
natio
n, a
nd a
lso
from
tim
e to
tim
e a
lter,
mod
ify,
com
mut
e, a
brog
ate
or d
eal
with
any
suc
h rig
hts,
priv
ilege
s, t
erm
s, c
ondi
tions
or
desi
gnat
ions
in a
ccor
danc
e w
ith th
e re
gula
tions
for t
he ti
me
bein
g of
the
Com
pany
.”
185
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
171
cond
ition
s or
de
sign
atio
ns
in
acco
rdan
ce w
ith t
he r
egul
atio
ns
for
the
time
bein
g of
th
e C
ompa
ny.”
To a
men
d Ar
ticle
9 of
the
Arti
cles
of
Ass
ocia
tion
“Sub
ject
to
th
e Ac
t, an
y pr
efer
ence
sha
res
may
with
the
sa
nctio
n of
an
ordi
nary
reso
lutio
n of
sh
areh
olde
rs
in
gene
ral
mee
ting,
be
issu
ed o
n th
e te
rms
that
they
are
,or
at th
e op
tion
of
the
Com
pany
are
or w
ill be
liab
le,
to
be
rede
emed
an
d th
e C
ompa
ny
shal
l no
t is
sue
pref
eren
ce
shar
es
rank
ing
in
prio
rity
to th
e pr
efer
ence
sha
res
alre
ady
issu
ed,
but
may
iss
ue
pref
eren
ce
shar
es
rank
ing
equa
lly
ther
ewith
. Pr
efer
ence
sh
areh
olde
rs s
hall
be e
ntitl
ed to
are
turn
of
capi
tal i
n pr
efer
ence
to
hol
ders
of
ordi
nary
sha
res
in
the
even
t th
at t
he C
ompa
ny i
s w
ound
up,
sha
ll ha
ve t
he s
ame
right
s as
ord
inar
y sh
areh
olde
rs
as r
egar
ds t
o re
ceiv
ing
notic
es,
repo
rts
and
audi
ted
finan
cial
st
atem
ents
, an
d at
tend
ing
gene
ral
mee
tings
of
th
e C
ompa
ny a
nd s
hall a
lso
have
the
right
to
vo
te
at
any
mee
ting
conv
ened
in e
ach
of th
e fo
llow
ing
circ
umst
ance
s:-
“The
Com
pany
may
issu
e Is
lam
ic R
edee
mab
le C
onve
rtibl
e Pr
efer
ence
Sha
res
(“R
CPS
-i") w
hich
sha
ll co
nfer
on
the
hold
ers
of R
CPS
-i th
e fo
llow
ing
right
s:
1.Is
sue
date
A da
te to
be
dete
rmin
ed b
y th
e Bo
ard
of D
irect
ors
of th
e C
ompa
ny (“
Boa
rd”)
.
2.Is
sue
pric
e R
M0.
41 p
er R
CPS
-i.
3.Fo
rm
The
RC
PS-i
will
be
issu
ed in
regi
ster
ed fo
rm.
4.B
oard
lot
For
the
purp
ose
of t
radi
ng o
n th
e M
ain
Mar
ket
of B
ursa
Mal
aysi
a Se
curit
ies
Berh
ad ("
Bur
sa S
ecur
ities
"), a
boa
rd lo
t of R
CP
S-i
will
be10
0 R
CPS
-i.
5.Te
nure
Five
(5) y
ears
from
the
Issu
e D
ate.
6.St
ruct
ure
desc
riptio
n (a
)Th
e R
CP
S-ih
olde
rs s
hall
inve
st d
irect
ly in
to t
he B
usin
ess
(as
defin
ed in
pa
ragr
aph
8(c)
belo
w) t
hrou
gh th
e su
bscr
iptio
n of
the
RC
PS
-ito
be
issu
ed
by th
e C
ompa
ny.
(b)
The
Com
pany
will
issu
e th
e R
CP
S-i
to th
e su
bscr
iber
s of
the
RC
PS-
i. Th
e R
CP
S-i
shal
l re
pres
ent
the
undi
vide
d pr
opor
tiona
te
inte
rest
of
th
e re
spec
tive
RC
PS-
ihol
ders
in th
e Bu
sine
ss.
(c)
Prof
its (a
s de
fined
in p
arag
raph
8(a)
belo
w),
subj
ect t
o ite
m (e
) bel
ow, s
hall
be d
istri
bute
d as
pre
fere
ntia
l div
iden
ds to
the
RC
PS-i
hold
ers
in p
ropo
rtion
to
the
resp
ectiv
e ca
pita
l con
tribu
tion
of th
e R
CPS
-iho
lder
s in
the
Busi
ness
.
186
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
172
a)w
hen
the
divi
dend
or
part
of
the
divi
dend
on
th
e pr
efer
ence
sh
ares
is
in
ar
rear
s fo
r m
ore
than
six
(6)
m
onth
s;
b)on
a p
ropo
sal t
o re
duce
the
C
ompa
ny’s
sha
re c
apita
l;
c)on
a p
ropo
sal f
or th
e di
spos
al
of
the
who
le
of
the
Com
pany
’s
prop
erty
, bu
sine
ss a
nd u
nder
taki
ng;
d)on
the
pro
posa
l th
at a
ffect
s rig
hts
atta
ched
to
th
e pr
efer
ence
sha
res;
e)on
a p
ropo
sal t
o w
ind-
up th
e C
ompa
ny; a
nd
f)du
ring
the
win
ding
-up
of t
he
Com
pany
.”
(d)
The
max
imum
am
ount
of
pr
efer
entia
l di
vide
nd
(i.e.
th
e Ex
pect
ed
Pref
eren
tial D
ivid
end
Amou
nt, a
s de
fined
in p
arag
raph
8(d)
belo
w) t
hat c
an
be d
ecla
red
and
paid
on
each
Pre
fere
ntia
l Div
iden
d En
title
men
t Dat
e (a
s de
fined
in p
arag
raph
9be
low
) sha
ll be
cap
ped
at th
e E
xpec
ted
Pref
eren
tial
Div
iden
d R
ate
(as
defin
ed i
n pa
ragr
aph
8(d)
belo
w),
unle
ss o
ther
wis
e de
cide
d by
the
Boa
rd p
ursu
ant t
o pa
ragr
aph
6(f)(
ii)be
low
. In
the
even
t tha
t th
e Pr
ofit
as a
t suc
h Pr
efer
entia
l Div
iden
d En
title
men
t Dat
e is
less
than
the
Expe
cted
Pre
fere
ntia
l Div
iden
d Am
ount
, the
Com
pany
may
, at i
ts d
iscr
etio
n,
decl
are
and
dist
ribut
e pr
efer
entia
l di
vide
nds
up t
o th
e am
ount
of
such
Pr
ofits
.
(e)
In th
e ev
ent t
hat d
ivid
ends
are
dec
lare
d, a
nd s
ubje
ct to
the
Boa
rd a
ppro
ving
su
ch d
ecla
ratio
n, t
he o
rdin
ary
shar
ehol
ders
shal
l w
aive
the
ir rig
ht t
o di
vide
nd p
aym
ent u
nles
s an
d un
til th
e C
ompa
ny h
as p
aid
any
pref
eren
tial
divi
dend
s de
clar
ed
but
unpa
id
or
Def
erre
d D
ivid
ends
(a
s de
fined
in
pa
ragr
aph
8(f)
belo
w)
to th
e R
CPS
-i ho
lder
s. F
or a
void
ance
of d
oubt
, it i
s ag
reed
that
the
pass
ing
of a
reso
lutio
n at
an
extra
ordi
nary
gen
eral
mee
ting
(“EG
M”)
of t
he o
rdin
ary
shar
ehol
ders
to a
men
d th
e C
onst
itutio
n (a
s de
fined
in
par
agra
ph8(
h)be
low
) (em
bedd
ing
the
right
s of
the
RC
PS-i
hold
ers)
, sha
ll re
pres
ent
thei
r ag
reem
ent
(in a
nd f
or c
ompl
ianc
e w
ith S
haria
h) f
or t
he
prio
rity
of d
istri
butio
n (o
f div
iden
ds) t
o be
dec
ided
by
the
Boar
d at
the
poin
t of
dis
tribu
tion
on th
eir b
ehal
f.
(f)O
n ea
ch P
refe
rent
ial D
ivid
end
Ent
itlem
entD
ate,
the
Com
pany
:
(i)m
ay, a
t its
dis
cret
ion,
dec
lare
and
dis
tribu
te p
refe
rent
ial d
ivid
end
up
to th
e Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt to
the
RC
PS-i
hold
ers,
su
bjec
t to
the
avai
labi
lity
of th
e Pr
ofits
.By
subs
crib
ing
to th
eR
CP
S-i,
the
RC
PS-i
hold
ers
shal
l (in
and
for c
ompl
ianc
e w
ith S
haria
h) w
aive
th
eir
right
to
rece
ive
any
Prof
its o
ver
and
abov
e th
e Ex
pect
ed
Pref
eren
tial D
ivid
end
Amou
nt th
at th
e Bo
ard
may
hav
e de
clar
ed; a
nd
(ii)
may
util
ise
any
Prof
it in
exc
ess
of (i
) abo
ve,f
or th
e Bu
sine
ss o
r suc
h ot
her
purp
ose
as t
he B
oard
dee
ms
fit,
incl
udin
g to
dec
lare
and
di
strib
ute
Addi
tiona
l Pre
fere
ntia
l Div
iden
d (a
s de
fined
in p
arag
raph
8(i)
belo
w).
187
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
173(g
)Su
bjec
t to
the
appr
oval
of t
he B
oard
for t
he d
istri
butio
n, th
e R
CPS
-iho
lder
s sh
all h
ave
the
right
to re
ceiv
e ca
sh p
aym
ent i
n fu
ll w
hich
sha
ll be
equ
ival
ent
to a
ll th
e ca
pita
l pai
d up
on
the
RC
PS
-iby
the
resp
ectiv
e ho
lder
, and
any
pr
efer
entia
l div
iden
ds d
ecla
red
but u
npai
d up
on th
e di
ssol
utio
n, w
indi
ng-u
p or
liqu
idat
ion
of th
e C
ompa
ny o
ut o
f the
pro
ceed
s of
liqui
datio
n of
the
asse
ts
of th
e C
ompa
ny. T
he h
olde
rs o
f the
ord
inar
y sh
ares
and
all
othe
r cla
sses
of
shar
es (
if an
y) in
the
Com
pany
sha
ll w
aive
thei
r rig
ht to
rec
eive
pro
ceed
s fro
m li
quid
atio
n, d
isso
lutio
n or
win
ding
-up
in fa
vour
of t
heR
CPS
-iho
lder
s un
til th
e R
CP
S-ih
olde
rs h
ave
rece
ived
thei
r pay
men
t in
full
on a
ll th
e ca
pita
l pa
id u
p on
the
RC
PS
-iby
the
res
pect
ive
hold
er,
and
any
pref
eren
tial
divi
dend
s de
clar
ed b
ut u
npai
d. F
or a
void
ance
of d
oubt
, it i
s ag
reed
that
the
pass
ing
of a
reso
lutio
n at
an
EGM
of t
he o
rdin
ary
shar
ehol
ders
to a
men
d th
eC
onst
itutio
n(e
mbe
ddin
g th
e rig
hts
of t
he R
CPS
-iho
lder
s),
shal
l re
pres
ent
thei
r ag
reem
ent
(in a
nd f
or c
ompl
ianc
e w
ith S
haria
h) f
or t
he
prio
rity
of d
istri
butio
n (o
f ass
ets
upon
the
liqui
datio
n, d
isso
lutio
n or
win
ding
-up
of t
he C
ompa
ny) t
o be
dec
ided
by
the
Boa
rd a
t the
poi
nt o
f dis
tribu
tion
on th
eir b
ehal
f.
(h)
By
subs
crib
ing
to t
he R
CPS
-i, t
he R
CP
S-i
hold
ers
agre
e (in
and
for
co
mpl
ianc
e w
ith S
haria
h) to
wai
ve th
eir
right
s to
rec
eive
(i)
any
rem
aini
ng
pref
eren
tial
divi
dend
s de
clar
ed b
ut i
s un
paid
or
cann
ot b
e pa
id i
f th
e av
aila
ble
amou
nt o
f pro
ceed
s fro
m th
e liq
uida
tion,
dis
solu
tion
or w
indi
ng-u
pof
the
ass
ets
of t
he C
ompa
ny is
insu
ffici
ent
to p
ay in
ful
l the
pre
fere
ntia
l di
vide
nds
that
hav
e be
en d
ecla
red
but r
emai
ns u
npai
d an
d (ii
) any
Def
erre
d D
ivid
ends
that
hav
e no
t bee
n de
clar
ed b
y th
e C
ompa
ny, w
ith s
uch
wai
ver
to b
e de
cide
d by
the
Boa
rd a
t the
rele
vant
tim
e on
thei
r beh
alf.
(i)Th
e R
CP
S-ih
olde
rs u
nder
take
to s
ell t
he u
ndiv
ided
pro
porti
onat
e in
tere
st
of th
e re
spec
tive
RC
PS-
ihol
ders
in th
e B
usin
ess
on th
e R
edem
ptio
n D
ate
(as
defin
ed in
par
agra
ph15
(a)b
elow
) at t
he R
edem
ptio
n Pr
ice
(as
defin
ed
in p
arag
raph
15(b
)bel
ow) w
hich
sal
e sh
all b
e co
nclu
ded
by w
ay o
f con
duct
upon
pay
men
t of t
he R
edem
ptio
n Pr
ice
by th
e C
ompa
ny.
(j)O
n th
e M
atur
ity D
ate,
any
out
stan
ding
RC
PS
-i sh
all b
e co
nver
ted
into
fully
pa
id o
rdin
ary
shar
es i
n ac
cord
ance
with
the
Con
vers
ion
Rat
io,
with
out
paym
ent o
f any
con
side
ratio
n.
188
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
174
7.R
anki
ng o
f R
CPS
-i(a
)R
anke
d eq
ually
am
ongs
t th
e R
CPS
-i an
d w
ith o
ther
pre
fere
nce
shar
es
issu
ed b
y th
e C
ompa
ny (i
f any
) with
out d
iscr
imin
atio
n, p
refe
renc
e or
prio
rity
amon
gst t
hem
selv
es in
all
resp
ects
.
(b)
Ran
ked
ahea
d in
poi
nt o
f prio
rity
to th
e ho
lder
s of
the
ordi
nary
sha
res
and
all o
ther
cla
sses
of s
hare
s (if
any
) in
the
Com
pany
, in
resp
ect o
f pay
men
t of
divi
dend
s an
d pa
ymen
t out
of a
sset
s of
the
Com
pany
upo
n an
y liq
uida
tion,
di
ssol
utio
n, o
r win
ding
-up
of th
e C
ompa
ny, p
rovi
ded
alw
ays
that
the
Boa
rd
appr
oves
suc
h pa
ymen
t of
div
iden
ds a
nd p
aym
ent
out
of a
sset
s of
the
C
ompa
ny o
n th
is b
asis
, an
d fu
rther
affi
rms
the
prio
rity
of p
aym
ent
as
desc
ribed
in th
is p
arag
raph
7.Fo
r avo
idan
ce o
f dou
bt, i
t is
agre
ed th
at th
e pa
ssin
g of
the
reso
lutio
n at
the
EGM
of t
he o
rdin
ary
shar
ehol
ders
to a
men
d th
eC
onst
itutio
n(e
mbe
ddin
g th
e rig
hts
of t
he R
CPS
-i ho
lder
s),
shal
l re
pres
ent t
heir
agre
emen
t in
and
for c
ompl
ianc
e w
ith S
haria
h, fo
r the
prio
rity
of d
istri
butio
n di
vide
nds
and
paym
ent
out
of a
sset
s to
be
deci
ded
by t
he
Boar
d at
the
poin
t of d
istri
butio
n, o
n th
eir b
ehal
f.
(c)
Subo
rdin
ated
to a
ll th
e C
ompa
ny’s
cre
dito
rs in
resp
ect o
f pay
men
t of d
ebt
and
paym
ents
ou
t of
as
sets
of
th
e C
ompa
ny
upon
an
y liq
uida
tion,
di
ssol
utio
n, o
r win
ding
-up
of th
e C
ompa
ny.
(d)
The
Boar
d sh
all n
ot is
sue
any
pref
eren
ce s
hare
s w
hich
rank
equ
ally
with
or
in p
riorit
y to
, the
RC
PS
-i, u
nles
s th
e is
sue
of s
uch
pref
eren
ce s
hare
s ha
s fir
st b
een
appr
oved
by
the
hold
ers
of t
he R
CP
S-i
by w
ay o
f an
ord
inar
y re
solu
tion
of s
uch
hold
ers.
8.Ex
pect
ed
Pref
eren
tial
Div
iden
d R
ate
Div
iden
d
(a)
The
RC
PS-
i sha
ll ca
rry
the
right
to re
ceiv
e pr
efer
entia
l div
iden
ds, o
ut o
f the
di
strib
utab
le p
rofit
s of
the
Com
pany
ear
ned
from
the
first
day
of t
he c
alen
dar
mon
th fo
llow
ing
the
Issu
e D
ate
("Pr
ofits
"), w
hen
decl
ared
and
app
rove
d by
th
e Bo
ard.
Any
dec
lara
tion
of p
refe
rent
ial d
ivid
end
shal
l be
subj
ect t
o th
e C
ompa
ny c
ompl
ying
with
any
cov
enan
ts th
at m
ay b
e ap
plic
able
from
tim
e to
tim
e an
d th
e ap
prov
al o
f th
e Bo
ard.
Suc
h ap
prov
al s
hall
incl
ude
an
affir
mat
ion
on th
e pr
iorit
y of
pay
men
t as
desc
ribed
in p
arag
raph
7ab
ove.
189
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
175(b
)Su
bjec
t to
com
plia
nce
with
par
agra
ph10
(a)
belo
w,
the
Com
pany
sha
ll ut
ilize
and
exh
aust
the
ret
aine
d ea
rnin
gs o
f th
e C
ompa
ny e
arne
d fo
r th
e pe
riod
prio
r to
the
Iss
ue D
ate
("Pr
e-Is
sue
Ret
aine
d Ea
rnin
gs")
for
the
pa
ymen
t of d
ivid
ends
to th
e or
dina
ry s
hare
hold
ers,
and
if s
uch
Pre-
Issu
e R
etai
ned
Ear
ning
s ar
e in
suffi
cien
t fo
r th
e pa
ymen
t of
div
iden
ds t
o th
e or
dina
ry s
hare
hold
ers,
the
Com
pany
may
als
o ut
ilize
the
Prof
its (
less
any
pr
efer
entia
l div
iden
ds d
ecla
red
but u
npai
d an
d an
y D
efer
red
Div
iden
ds) f
or
such
pay
men
t.
(c)
Prof
its s
hall
be d
istri
bute
d as
pre
fere
ntia
l div
iden
ds to
the
RC
PS
-i ho
lder
s in
pro
porti
on to
the
resp
ectiv
e ca
pita
l con
tribu
tion
of th
e R
CPS
-i ho
lder
s in
th
eSh
aria
h-co
mpl
iant
gen
eral
bus
ines
s of
the
Com
pany
("B
usin
ess"
).
(d)
The
expe
cted
pre
fere
ntia
l div
iden
d ra
te p
er a
nnum
sha
ll be
fiv
e pe
rcen
t (5
%)p
er a
nnum
(“Ex
pect
ed P
refe
rent
ial D
ivid
end
Rat
e”).
The
max
imum
am
ount
of
pref
eren
tial d
ivid
ends
that
can
be
decl
ared
and
pa
id
on
each
Pr
efer
entia
l D
ivid
end
Ent
itlem
ent
Dat
e ("
Expe
cted
Pr
efer
entia
l D
ivid
end
Am
ount
"),
shal
l be
cap
ped
at s
uch
Expe
cted
Pr
efer
entia
l Div
iden
d R
ate.
The
Com
pany
may
dec
lare
add
ition
al d
ivid
ends
in
the
circ
umst
ance
s se
t out
in p
arag
raph
8(i)
, 8(j)
and
8(l)
bel
ow,
Def
erre
d D
ivid
ends
/ N
on P
aym
ent o
f Pre
fere
ntia
l Div
iden
ds
(e)
On
any
Pref
eren
tial D
ivid
end
Entit
lem
entD
ate:
(i)in
the
even
t tha
t the
Pro
fits
are
low
er th
an th
e Ex
pect
ed P
refe
rent
ial
Div
iden
d Am
ount
and
the
Com
pany
doe
s no
t dec
lare
the
pref
eren
tial
divi
dend
s up
to th
e Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt (i
n w
hole
or
in p
art):
(aa)
the
Com
pany
may
, at
its
dis
cret
ion,
dec
lare
and
pay
any
am
ount
of p
refe
rent
ial d
ivid
ends
up
to a
n am
ount
equ
al to
the
Prof
its a
s at
suc
h Pr
efer
entia
l Div
iden
d En
title
men
tDat
e. (T
he
amou
nt o
f Pr
ofits
dec
lare
d as
pre
fere
ntia
l di
vide
nds
by t
he
Com
pany
on
a pa
rticu
lar
Pref
eren
tial
Div
iden
d En
title
men
tD
ate,
if a
ny, s
hall
be re
ferr
ed to
as
"Dec
lare
d Su
m")
; and
190
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
176
(bb)
the
amou
nt e
quiv
alen
t to
the
diffe
renc
e be
twee
n: (A
) the
Pro
fits
as a
t su
ch P
refe
rent
ial
Div
iden
d En
title
men
tD
ate;
and
(B)
D
ecla
red
Sum
, sha
ll be
cum
ulat
ive
("D
efer
red
Div
iden
ds 1
"),
so lo
ng a
s th
e R
CPS
-i re
mai
ns u
nred
eem
ed. I
n th
is in
stan
ce,
the
amou
nt e
quiv
alen
t to
the
diff
eren
ce b
etw
een:
(A)
the
Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt; a
nd (B
) the
Pro
fits
as
at s
uch
Pref
eren
tial
Div
iden
d En
title
men
tD
ate,
sha
ll no
t be
cu
mul
ativ
e; a
nd
(ii)
in th
e ev
ent t
hat t
he P
rofit
s ar
e m
ore
than
the
Expe
cted
Pre
fere
ntia
l D
ivid
end
Amou
nt a
nd th
e C
ompa
nydo
es n
ot d
ecla
re th
e pr
efer
entia
l di
vide
nds
up to
the
Expe
cted
Pre
fere
ntia
l Div
iden
d A
mou
nt (i
n w
hole
or
in p
art):
(a
a)th
e am
ount
equ
ival
ent
to t
he d
iffer
ence
bet
wee
n: (
A) t
he
Expe
cted
Pre
fere
ntia
l Div
iden
d Am
ount
; and
(B)
the
Dec
lare
d Su
m, s
hall
be c
umul
ativ
e ("
Def
erre
d D
ivid
ends
2")
, so
long
as
the
RC
PS-
i rem
ains
unr
edee
med
.
(f)D
efer
red
Div
iden
ds 1
and
Def
erre
d D
ivid
ends
2 (
as t
he c
ase
may
be)
("
Def
erre
d D
ivid
ends
") m
ay b
e de
clar
ed a
nd/o
r pa
id, a
t the
dis
cret
ion
of
the
Com
pany
, on
any
subs
eque
nt P
refe
rent
ial D
ivid
end
Entit
lem
entD
ate,
pr
ovid
ed t
hat
the
Cum
ulat
ive
Con
ditio
n is
ful
fille
d on
suc
h Pr
efer
entia
l D
ivid
end
Entit
lem
entD
ate.
"Cum
ulat
ive
Con
ditio
n"
of
the
RC
PS
-i m
eans
on
an
y pa
rticu
lar
Pref
eren
tial D
ivid
end
Ent
itlem
entD
ate,
the
Com
pany
:
(i)ha
s su
ffici
ent P
rofit
s th
at is
at l
east
equ
ival
ent t
o th
e ag
greg
ate
of: (
A)
the
Dec
lare
d Su
m; a
nd (B
) an
y D
efer
red
Div
iden
ds a
ccum
ulat
ed a
s at
and
on
such
Pre
fere
ntia
l Div
iden
d En
title
men
tDat
e;
(ii)
has
mai
ntai
ned
book
s an
d re
cord
s th
at e
vide
nce
the
Com
pany
ha
ving
Pro
fits
that
is a
t lea
st e
quiv
alen
t to
the
aggr
egat
e of
: (A)
the
Dec
lare
d Su
m; a
nd (
B) a
ny D
efer
red
Div
iden
ds a
ccum
ulat
ed a
s at
an
d on
suc
h Pr
efer
entia
l Div
iden
d E
ntitl
emen
tDat
e; a
nd
191
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
177
(iii)
mak
es a
n an
noun
cem
ent
on t
he M
ain
Mar
ket
of B
ursa
Sec
uriti
es
that
su
ch
amou
nt
of
Def
erre
d D
ivid
ends
on
su
ch
Pref
eren
tial
Div
iden
d En
title
men
tDat
e sh
all b
e cu
mul
ativ
e.
(g)
The
Def
erre
d D
ivid
ends
sha
ll no
t be
paya
ble
to th
e R
CPS
-iho
lder
s if
the
Com
pany
has
not
dec
lare
d it
as a
pre
fere
ntia
l di
vide
nd.
For
clar
ity,
the
Def
erre
d D
ivid
ends
tha
t ar
e no
t de
clar
ed w
ill no
t be
pay
able
in
the
follo
win
gci
rcum
stan
ces:
(i)up
on t
he w
indi
ng-u
p, l
iqui
datio
n or
dis
solu
tion
of t
he C
ompa
ny.
Acco
rdin
gly,
the
RC
PS
-iho
lder
s sh
all (
in a
nd f
or c
ompl
ianc
e w
ith
Shar
iah,
and
by
the
deci
sion
of t
he B
oard
at t
he re
leva
nt ti
me
on th
eir
beha
lf) w
aive
all
Def
erre
d D
ivid
ends
tha
t th
e C
ompa
ny h
as n
ot
decl
ared
; and
(ii)
upon
the
RC
PS
-iho
lder
s co
nver
ting
the
RC
PS-i
to o
rdin
ary
shar
es.
Acco
rdin
gly,
the
RC
PS
-iho
lder
s sh
all (
in a
nd f
or c
ompl
ianc
e w
ith
Shar
iah)
wai
ve a
ll D
efer
red
Div
iden
ds t
hat
the
Com
pany
has
not
de
clar
ed.
(h)
Whe
re t
here
are
no
Prof
its a
vaila
ble
for
the
decl
arat
ion
and
paym
ent
of
divi
dend
s (in
ac
cord
ance
w
ith
the
Con
stitu
tion
of
the
Com
pany
("
Con
stitu
tion"
) an
d th
e C
ompa
nies
Ac
t 20
16
(or
such
ap
plic
able
le
gisl
atio
n fo
r the
tim
e be
ing)
("C
ompa
nies
Act
")),
the
Com
pany
sha
ll ha
ve
no o
blig
atio
n to
dec
lare
or
dist
ribut
e an
y pr
efer
entia
l di
vide
nds
on t
he
rele
vant
Pre
fere
ntia
l Div
iden
d En
title
men
tDat
e. S
uch
pref
eren
tial d
ivid
ends
sh
all n
ot b
e cu
mul
ativ
e.
192
APPE
ND
IX V
AMEN
DM
ENTS
TO
OU
R C
ON
STIT
UTIO
N (C
ont’d
)
178E
xces
s of
Pro
fits
(i)O
n an
y Pr
efer
entia
l Div
iden
d En
title
men
tDat
e, in
the
even
t tha
t the
Pro
fits
are
mor
e th
an th
e Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt a
nd th
e C
ompa
ny
decl
ares
an
d di
strib
utes
pr
efer
entia
l di
vide
nds
up
to
the
Expe
cted
Pr
efer
entia
l D
ivid
end
Amou
nt,
any
exce
ss
of
the
Prof
its
afte
r su
ch
decl
arat
ion
may
be
utiliz
ed b
y th
e C
ompa
ny fo
r the
Bus
ines
s or
suc
h ot
her
purp
ose
as th
e Bo
ard
at it
s so
le d
iscr
etio
n de
ems
fit a
nd in
the
inte
rest
of
the
Com
pany
, in
clud
ing
to d
ecla
re a
nd d
istri
bute
add
ition
al p
refe
rent
ial
divi
dend
s of
suc
h am
ount
as
the
Boar
d de
ems
fit th
at is
in e
xces
s of
the
Expe
cted
Pre
fere
ntia
l Div
iden
d Am
ount
but
not
exc
eedi
ng t
he P
rofit
s on
su
ch P
refe
rent
ial
Div
iden
d En
title
men
tD
ate
or t
o re
deem
any
RC
PS-i
("Ad
ditio
nal P
refe
rent
ial D
ivid
end"
).
(j)At
the
Pre
fere
ntia
l Div
iden
d En
title
men
t D
ate
imm
edia
tely
pre
cedi
ng t
he
mat
urity
dat
e, w
hich
is th
e da
y im
med
iate
ly p
rece
ding
the
5than
nive
rsar
y fro
m th
e Is
sue
Dat
e (“
Mat
urity
Dat
e”),
prio
r to
con
vers
ion
of th
e R
CPS
-i,
the
Com
pany
may
, at i
ts d
iscr
etio
n,de
clar
e, to
the
exte
nt th
ere
are
Prof
its
avai
labl
e fo
r dis
tribu
tion,
to th
e R
CPS
-i ho
lder
s:
(i)Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt;
(ii)
Def
erre
d D
ivid
ends
; and
/or
(iii)
incr
emen
tal p
refe
rent
ial d
ivid
end
(sub
ject
a m
axim
um e
ffect
ive
retu
rn o
f te
n pe
rcen
t (10
%)
per
annu
mco
mpu
ted
base
d on
the
inte
rnal
rat
e of
re
turn
form
ula
(“Ef
fect
ive
Ret
urn”
),fro
m th
e Is
sue
Dat
e an
d up
to th
e M
atur
ity D
ate,
and
afte
r tak
ing
into
acc
ount
all:
(aa)
Ex
pect
ed P
refe
rent
ial D
ivid
end
Amou
nt;
(bb)
D
efer
red
Div
iden
ds;
(cc)
Addi
tiona
l Pre
fere
ntia
l Div
iden
d; a
nd
(dd)
Spec
ial P
refe
rent
ial D
ivid
end,
193
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
179
(item
s (a
a) t
o (d
d) a
bove
are
col
lect
ivel
y re
ferr
ed t
o as
“Pr
efer
entia
l D
ivid
end”
) dec
lare
d an
d pa
id u
p to
the
Mat
urity
Dat
e an
d th
e di
ffere
nce
betw
een
the
Issu
e Pr
ice
and
the
30-d
ay v
olum
e w
eigh
ted
aver
age
mar
ket
pric
e of
the
Com
pany
’s o
rdin
ary
shar
es p
rior
to t
he s
aid
Pref
eren
tial D
ivid
end
Ent
itlem
ent D
ate)
.
Pos
t-Con
vers
ion
(k)
Each
RC
PS-i
hold
er s
hall
ceas
e to
rece
ive
any
pref
eren
tial d
ivid
ends
from
an
d in
clud
ing
the
date
the
RC
PS
-i is
con
verte
d in
to N
ew O
rdin
ary
Shar
es
(as
defin
ed i
n pa
ragr
aph
11(a
)be
low
) sa
ve f
or p
refe
rent
ial
divi
dend
s de
clar
ed
and
unpa
id
(incl
udin
g D
efer
red
Div
iden
ds
(as
expl
aine
d in
pa
ragr
aph
11(d
) bel
ow) u
p to
the
date
of t
he c
onve
rsio
n).
Spec
ial D
ivid
end
(l)Th
e C
ompa
ny m
ay u
tiliz
e th
e Pr
e-Is
sue
Ret
aine
d Ea
rnin
gs a
t its
sol
e di
scre
tion
if it
deem
s fit
and
in th
e in
tere
st o
f the
Com
pany
, to
decl
are
and
dist
ribut
e ad
ditio
nal
pref
eren
tial
divi
dend
s of
suc
h am
ount
as
the
Boar
d de
ems
fit ("
Spec
ial P
refe
rent
ial D
ivid
end"
).
9.D
ivid
end
entit
lem
ent
perio
d
Subj
ect
to
the
avai
labi
lity
of
Prof
its,
the
pref
eren
tial
divi
dend
s sh
all
be
dist
ribut
able
sem
i-ann
ually
(sa
ve in
res
pect
of
the
first
dis
tribu
tion)
, w
ith t
he
RC
PS-
i hol
ders
bei
ng e
ntitl
ed to
the
first
dis
tribu
tion
no la
ter t
han
six
(6) m
onth
s fo
llow
ing
the
Issu
e D
ate,
and
sub
sequ
ently
, at s
ucce
ssiv
e in
terv
als
of e
very
six
(6
) mon
ths
ther
eafte
r (ea
ch o
f the
afo
rem
entio
ned
date
s sh
all b
e re
ferr
ed to
as
"Pre
fere
ntia
lDiv
iden
d En
title
men
t Dat
e").
10.R
estr
ictio
ns
on p
aym
ent o
f di
vide
nds
to
ordi
nary
sh
ares
(a)
So l
ong
as a
ny R
CPS
-i re
mai
ns u
nred
eem
ed,
and
in t
he e
vent
tha
t di
vide
nds
are
decl
ared
and
the
pre
fere
ntia
l tre
atm
ent
is a
ppro
ved
by t
he
Boar
d on
the
day
of th
e di
vide
nd d
ecla
ratio
n, th
e C
ompa
ny s
hall
not p
ay o
r di
strib
ute
any
divi
dend
on
its o
rdin
ary
shar
es,
unle
ss t
he p
refe
rent
ial
divi
dend
pay
able
on
the
RC
PS-i
for t
he p
erio
d im
med
iate
ly p
rece
ding
such
or
dina
ry s
hare
div
iden
d an
d an
y pr
efer
entia
l div
iden
ds d
ecla
red
but u
npai
d or
Def
erre
d D
ivid
ends
, has
bee
n pa
id o
r oth
erw
ise
prov
ided
for i
n fu
ll.
194
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
180(b
)In
the
even
t tha
t div
iden
ds a
re d
ecla
red,
and
sub
ject
to th
e B
oard
app
rovi
ng
the
paym
ent a
nd a
ffirm
ing
the
prio
rity
of p
aym
ent a
s de
scrib
ed in
par
agra
ph7,
the
ord
inar
y sh
areh
olde
rs s
hall
wai
ve t
heir
right
to
divi
dend
pay
men
t, un
less
and
unt
il th
e C
ompa
ny h
as p
aid
such
pre
fere
ntia
l div
iden
ds d
ecla
red
but u
npai
d or
Def
erre
d D
ivid
end
to th
e R
CPS
-i ho
lder
s. F
or a
void
ance
of
doub
t, it
is a
gree
d th
at t
he p
assi
ng o
f th
e re
solu
tion
at t
he E
GM
of
the
ordi
nary
sha
reho
lder
s to
am
end
the
Con
stitu
tion
(em
bedd
ing
the
right
s of
th
e R
CP
S-i
hold
ers)
, sha
ll re
pres
ent t
heir
agre
emen
t in
and
for c
ompl
ianc
e w
ith S
haria
h, fo
r th
e pr
iorit
y of
dis
tribu
tion
(of d
ivid
ends
) to
be
deci
ded
by
the
Boar
d at
the
poin
t of d
istri
butio
n on
thei
r beh
alf.
11
.Con
vers
ion
right
sC
onve
rsio
n R
ight
s
(a)
The
fully
pai
d-up
RC
PS
-i sh
all b
e co
nver
tible
into
suc
h nu
mbe
r of f
ully
-pai
d or
dina
ry
shar
es
of
the
Com
pany
("
New
O
rdin
ary
Shar
es")
, w
ithou
t pa
ymen
t of a
ny c
onsi
dera
tion
and
in a
ccor
danc
e w
ith th
e C
onve
rsio
n R
atio
("
Con
vers
ion
Rig
ht")
at M
atur
ity D
ate.
(b)
Subj
ect t
o co
mpl
ianc
e w
ith a
ll app
licab
le la
ws
and
regu
latio
ns, t
he C
ompa
ny
shal
l tak
e su
ch re
quis
itest
eps
to a
llot a
nd is
sue
the
New
Ord
inar
y Sh
ares
, ap
ply
for t
he li
stin
g of
and
quo
tatio
n fo
r the
New
Ord
inar
y S
hare
s an
d cr
edit
the
New
Ord
inar
y Sh
ares
into
the
hold
er's
sec
uriti
es a
ccou
nt c
reat
ed w
ith
the
Cen
tral D
epos
itory
Sys
tem
pur
suan
t to
the
Sec
uriti
es In
dust
ry (C
entra
l D
epos
itorie
s) A
ct 1
991
and
the
Rul
es o
f Bur
sa M
alay
sia
Dep
osito
ry S
dn.
Bhd.
, fo
r th
e re
cord
ing
of d
epos
it of
sec
uriti
es a
nd f
or d
ealin
g in
suc
h se
curit
ies
by th
e de
posi
tor.
No
phys
ical
sha
re c
ertif
icat
es w
ill b
e is
sued
to
the
RC
PS
-i ho
lder
in re
spec
t of t
he c
onve
rsio
n.
(c)
The
Com
pany
sha
ll not
be
requ
ired
to c
onve
rt an
y R
CP
S-i
of a
hol
der w
here
co
nver
sion
of t
he R
CPS
-iw
ould
be
cont
rary
to th
e la
ws
of M
alay
sia.
(d)
Not
with
stan
ding
the
Con
vers
ion
Rig
ht, t
he R
CP
S-i
shal
l rem
ain
entit
led
to
any
Def
erre
d D
ivid
ends
tha
t ha
ve n
ot b
een
decl
ared
as
pref
eren
tial
divi
dend
s as
at t
he M
atur
ity D
ate,
whi
ch s
hall
be p
aid
in a
ccor
danc
e w
ithth
e pr
ovis
ions
of p
arag
raph
10(
b) a
bove
.
195
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
181
12.C
onve
rsio
n ra
tio(a
)Th
e co
nver
sion
ratio
of t
he R
CP
S-i
is o
ne (1
) New
Ord
inar
y Sh
are
for e
very
on
e (1
) RC
PS
-i he
ld, o
r suc
h ot
her r
evis
ed c
onve
rsio
n ra
tio th
at th
e Bo
ard
may
dec
ide
at a
late
r dat
e (“
Con
vers
ion
Rat
io”)
.
(b)
If th
e co
nver
sion
resu
lts in
a fr
actio
nal e
ntitl
emen
t to
New
Ord
inar
y Sh
ares
, su
ch f
ract
iona
l ent
itlem
ent
shal
l be
disr
egar
ded
and
no r
efun
d or
cre
dit,
whe
ther
in th
e fo
rm o
f RC
PS
-i, c
ash
or o
ther
wis
e, s
hall
be g
iven
in re
spec
t of
the
disr
egar
ded
fract
iona
l ent
itlem
ent.
13.A
djus
tmen
t to
th
e C
onve
rsio
n R
atio
The
Con
vers
ion
Rat
io s
hall
be s
ubje
ct to
adj
ustm
ents
from
tim
e to
tim
e, a
t the
de
term
inat
ion
of th
e B
oard
, in
the
even
t of a
ny a
ltera
tion
to th
e C
ompa
ny’s
sha
re
capi
tal,
whe
ther
by
way
of
right
s is
sue,
cap
italis
atio
n is
sue,
con
solid
atio
n of
sh
ares
, sub
divi
sion
of s
hare
s or
redu
ctio
n of
cap
ital h
owso
ever
bei
ngef
fect
ed,
in a
ccor
danc
e w
ith th
e pr
ovis
ions
of t
he C
onst
itutio
n. T
he C
ompa
ny s
hall
give
no
tice
in w
ritin
g to
the
RC
PS
-i ho
lder
s of
its
inte
ntio
n to
mak
e su
ch a
djus
tmen
ts
to th
e C
onve
rsio
n R
atio
.
14.R
anki
ng
of
New
Ord
inar
y Sh
ares
co
nver
ted
from
RC
PS-i
The
New
Ord
inar
y S
hare
s sh
all u
pon
allo
tmen
t an
d is
sue
rank
equ
ally
in a
ll re
spec
ts w
ith t
he t
hen
issu
ed o
rdin
ary
shar
es o
f th
e C
ompa
ny in
clud
ing
the
entit
lem
ents
to d
ivid
ends
, rig
hts,
allo
tmen
ts o
r ot
her
dist
ribut
ions
, exc
ept
that
th
ey s
hall
not
be e
ntitl
ed t
o an
y di
vide
nds,
rig
hts,
allo
tmen
ts a
nd/o
r ot
her
dist
ribut
ions
,of w
hich
the
entit
lem
ent d
ate
is b
efor
e th
e da
te o
f allo
tmen
t of s
uch
New
Ord
inar
y S
hare
s.
15.R
edem
ptio
n(a
)Th
e C
ompa
ny m
ay a
t any
tim
e af
ter t
he Is
sue
Dat
e, a
t its
dis
cret
ion,
rede
em
who
lly o
r in
par
t on
a pr
o ra
ta b
asis
the
outs
tand
ing
RC
PS
-i by
giv
ing
not
less
tha
n th
irty
(30)
days
’ no
tice
in w
ritin
g to
the
RC
PS-i
hold
ers
of i
ts
inte
ntio
n to
do
so, s
ubje
ct to
com
plia
nce
with
the
Com
pani
es A
ct, i
nclu
ding
w
here
suc
h R
CPS
-i is
inte
nded
to
be r
edee
med
out
of
the
capi
tal o
f th
e C
ompa
ny, s
uch
notic
e of
rede
mpt
ion
shal
l be
subj
ect t
o al
l dire
ctor
s of
the
Com
pany
hav
ing
mad
e a
solv
ency
sta
tem
ent i
n re
latio
n to
suc
h re
dem
ptio
n in
acc
orda
nce
with
the
prov
isio
ns o
f the
Com
pani
es A
ct. T
he re
dem
ptio
n of
th
e R
CPS
-i sh
all t
ake
effe
ct o
n th
e 30
th d
ay fr
om th
e da
te o
f the
not
ice
or
such
oth
er l
ater
dat
e as
may
be
spec
ified
in
the
notic
e ("
Red
empt
ion
Dat
e").
The
Red
empt
ion
Dat
e an
d bo
ok c
losu
re d
ate
to b
e us
ed t
o de
term
ine
the
RC
PS
-i ho
lder
s w
ho a
re e
ntitl
ed to
rec
eive
the
rede
mpt
ion
paym
ent s
hall
be s
tate
d in
the
notic
e.
196
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
182(b
)O
nth
e R
edem
ptio
n D
ate,
if
the
Com
pany
de
cide
s to
re
deem
th
e ou
tsta
ndin
g R
CPS
-ias
des
crib
ed in
item
(a)
abo
ve, t
he r
edem
ptio
n pr
ice,
pa
yabl
e in
cas
h,sh
all b
e th
e ag
greg
ate
of: (
i) th
e Is
sue
Pric
e of
the
RC
PS
-i;
(ii)
any
pref
eren
tial d
ivid
ends
dec
lare
d bu
t unp
aid
as a
t the
Red
empt
ion
Dat
e; (
iii) a
ny D
efer
red
Div
iden
ds a
s at
the
Red
empt
ion
Dat
e; a
nd (
iv)
a re
dem
ptio
n ad
just
men
t tha
t yie
lds
an E
ffect
ive
Ret
urn
from
the
Issu
e D
ate
and
up t
o th
e R
edem
ptio
n D
ate,
out
of
the
dist
ribut
able
pro
fits
of t
he
Com
pany
and
afte
r ta
king
int
o ac
coun
t (i)
, (ii
) an
d (ii
i) ab
ove
and
all
Pref
eren
tial
Div
iden
d de
clar
ed a
nd p
aid
up t
o th
e R
edem
ptio
n D
ate
("R
edem
ptio
n Pr
ice"
).
(c)
The
Com
pany
sha
ll no
t red
eem
any
RC
PS
-i of
a h
olde
r whe
re re
dem
ptio
n of
the
RC
PS
-i w
ould
be
cont
rary
to th
e la
ws
of M
alay
sia
or th
e C
onst
itutio
n.
(d)
The
RC
PS
-i ho
lder
s sh
all s
ell t
he u
ndiv
ided
pro
porti
onat
e in
tere
st o
f th
e re
spec
tive
RC
PS
-i ho
lder
s in
the
Busi
ness
on
the
Red
empt
ion
Dat
e to
the
Com
pany
at
the
Red
empt
ion
Pric
e, a
nd p
ursu
ant
to t
he r
edem
ptio
n an
dpa
ymen
t of t
he R
edem
ptio
n Pr
ice
on th
e R
edem
ptio
n D
ate
for t
he R
CP
S-i
rede
emed
, al
l rig
hts,
ben
efits
and
ent
itlem
ents
acc
orde
d to
suc
h R
CP
S-i
hold
ers,
sha
ll ce
ase.
(e)
Upo
n re
dem
ptio
n of
the
RC
PS
-i, t
he R
CPS
-i ho
lder
s sh
all
(in a
nd f
or
com
plia
nce
with
Sha
riah)
wai
ve th
eir r
ight
s to
rece
ive
any
Prof
it th
at h
as n
ot
been
dec
lare
d as
pre
fere
ntia
l div
iden
d by
the
Com
pany
and
whi
ch d
o no
t fo
rm a
ny p
art o
f the
Def
erre
d D
ivid
ends
from
the
perio
d be
ginn
ing
on th
e la
st d
ivid
end
decl
arat
ion
date
pre
cedi
ng t
he R
edem
ptio
n D
ate
up t
o th
e R
edem
ptio
n D
ate.
By
subs
crib
ing
to th
e R
CP
S-i,
the
RC
PS-i
hold
ers
agre
e (in
and
for
com
plia
nce
with
Sha
riah)
to th
is w
aive
r w
ith s
uch
wai
ver
to b
e de
cide
d by
the
Boar
d at
the
poin
t of r
edem
ptio
n on
thei
r beh
alf.
16.P
artic
ipat
ion
in p
rofit
sSu
bjec
t to
the
right
s to
the
pref
eren
tial d
ivid
ends
and
any
Add
ition
al P
refe
rent
ial
Div
iden
ds, t
he R
CP
S-i
hold
ers
shal
l not
be
entit
led
to p
artic
ipat
e in
the
surp
lus
prof
its (
if an
y) r
emai
ning
at
such
tim
e af
ter
the
paym
ent
of t
he p
refe
rent
ial
divi
dend
s an
d su
ch A
dditi
onal
Pre
fere
ntia
l Div
iden
ds (i
f any
).
197
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
183
17.L
iqui
datio
n,
diss
olut
ion
or
win
ding
-up
pref
eren
ce
(a)
On
a re
turn
of
capi
tal o
n th
e di
ssol
utio
n, w
indi
ng-u
p or
liqu
idat
ion
of t
he
Com
pany
, th
e R
CP
S-i
hold
ers
shal
l ha
ve,
in p
riorit
y to
the
hol
ders
of
ordi
nary
sha
res
and
all o
ther
cla
sses
of s
hare
s (if
any
) in
the
Com
pany
, the
rig
ht t
o pa
ymen
t of
: (i)
all
capi
tal
paid
up
on t
he R
CPS
-i; a
nd (
ii) a
ny
pref
eren
tial d
ivid
ends
dec
lare
d bu
t un
paid
, bu
t sh
all h
ave
no r
ight
to
the
resi
due
(if a
ny) o
f suc
h su
rplu
s as
sets
that
sha
ll re
mai
n af
ter p
aym
ent o
f the
ca
pita
l pai
d up
on
all o
ther
cla
sses
of s
hare
s in
the
Com
pany
.
(b)
Subj
ect
to t
he a
ppro
val
of t
he B
oard
for
the
dis
tribu
tion,
the
hol
ders
of
ordi
nary
sha
res
and
all o
ther
cla
sses
of s
hare
s (if
any
) in
the
Com
pany
shal
l w
aive
thei
r rig
ht to
rece
ive
proc
eeds
from
liqu
idat
ion,
dis
solu
tion
or w
indi
ng-
up f
or t
he b
enef
it of
the
RC
PS-
iho
lder
s un
til t
he R
CP
S-i
hold
ers
have
re
ceiv
ed th
eir
paym
ent i
n fu
ll on
all
capi
tal p
aid
up o
n th
e R
CP
S-i
by th
e re
spec
tive
hold
er, a
nd a
ny p
refe
rent
ial d
ivid
ends
dec
lare
d bu
t unp
aid.
For
av
oida
nce
of d
oubt
, it i
s ag
reed
that
the
pass
ing
of a
reso
lutio
n at
an
EGM
of
the
ord
inar
y sh
areh
olde
rs t
o am
end
the
Con
stitu
tion
(em
bedd
ing
the
right
s of
the
RC
PS-i
hold
ers)
, sha
ll re
pres
ent
thei
r ag
reem
ent (
in a
nd f
or
com
plia
nce
with
Sha
riah)
for t
he p
riorit
y of
dis
tribu
tion
(of a
sset
s up
on th
e liq
uida
tion,
dis
solu
tion
or w
indi
ng-u
p of
the
Com
pany
) to
be d
ecid
ed b
y th
e Bo
ard
at th
e po
int o
f dis
tribu
tion
on th
eir b
ehal
f.
(c)
The
Com
pany
sha
ll pa
y in
cas
h an
d in
ful
l, th
e am
ount
whi
ch s
hall
be
equi
vale
nt t
o: (
i) al
l the
cap
ital p
aid
up o
n th
e R
CP
S-i
by t
he r
espe
ctiv
e ho
lder
; an
d (ii
) an
y pr
efer
entia
l di
vide
nds
decl
ared
but
unp
aid
upon
liq
uida
tion,
dis
solu
tion
or w
indi
ng-u
p of
the
Com
pany
, out
of t
he p
roce
eds
of li
quid
atio
n of
the
asse
ts o
f the
Com
pany
.
(d)
By
subs
crib
ing
to t
he R
CPS
-i, t
he R
CP
S-i
hold
ers
agre
e (in
and
for
co
mpl
ianc
e w
ith S
haria
h) t
o w
aive
any
Def
erre
d D
ivid
ends
tha
t ha
ve n
otbe
en d
ecla
red
as p
refe
rent
ial d
ivid
ends
by
the
Com
pany
up
to th
e po
int o
f liq
uida
tion,
dis
solu
tion
or w
indi
ng-u
p of
the
Com
pany
, with
suc
h w
aive
r to
be
dec
ided
by
the
Boar
d at
the
rele
vant
tim
e on
thei
r beh
alf.
198
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
184
18.V
otin
g rig
hts
(a)
The
RC
PS-
i hol
ders
sha
ll be
ent
itled
to th
e sa
me
right
s as
hol
ders
of t
he
Com
pany
's o
rdin
ary
shar
es a
s re
gard
to th
e re
ceip
t of n
otic
es (i
nclu
ding
that
of
gen
eral
mee
tings
), re
ports
and
aud
ited
finan
cial
sta
tem
ents
, to
atte
nd
mee
tings
and
to re
ceiv
e sh
areh
olde
rs’ r
esol
utio
ns in
writ
ing,
but
sha
ll no
t be
entit
led
to v
ote
or a
ppro
ve a
ny s
hare
hold
ers'
res
olut
ions
or
vote
at
any
gene
ral
mee
ting
of t
he C
ompa
ny,
save
and
exc
ept
in r
espe
ct o
f an
y re
solu
tion
mad
e:
(i)w
hen
the
pref
eren
tial d
ivid
ends
or
any
part
ther
eof
is in
arr
ears
and
un
paid
for m
ore
than
six
(6) m
onth
s;
(ii)
on a
pro
posa
l to
redu
ce th
e C
ompa
ny’s
sha
re c
apita
l;
(iii)
on a
pro
posa
l fo
r th
e di
spos
al o
f su
bsta
ntia
lly t
he w
hole
of
the
Com
pany
’s p
rope
rty, b
usin
ess
and
unde
rtaki
ng;
(iv)
on a
pro
posa
l to
win
d-up
the
Com
pany
;
(v)
durin
g th
e w
indi
ng-u
p of
the
Com
pany
; or
(vi)
on a
ny p
ropo
sal t
hat
affe
cts
the
right
s an
d pr
ivile
ges
atta
ched
to
the
RC
PS-
i, in
clud
ing
the
amen
dmen
ts to
the
Con
stitu
tion.
(b)
In a
ny o
f th
e af
ores
aid
circ
umst
ance
s in
par
agra
ph18
(a),
each
RC
PS
-iho
lder
sha
ll be
ent
itled
to v
ote
at a
ll ge
nera
l mee
tings
of t
he m
embe
rs o
f its
cl
ass,
and
on
a po
ll at
any
suc
h ge
nera
l mee
tings
to
one
vote
for
eac
h R
CP
S-i
held
.
(c)
Failu
re b
y th
e C
ompa
ny to
pro
vide
any
not
ice
of a
ny d
ocum
ent r
efer
red
to
in p
arag
raph
18(a
)abo
ve (s
ave
in re
spec
t of t
he a
fore
said
exc
eptio
ns) w
ill
not a
ffect
the
valid
ity o
f any
mee
ting
(or a
ny p
roce
edin
gs a
t any
mee
ting)
, tra
nsac
tion
or d
ocum
ent
conn
ecte
d w
ith t
he d
ocum
ent
whi
ch w
as n
ot
rece
ived
by
a ho
lder
of R
CPS
-i.
19.L
istin
g st
atus
of
RC
PS-i
(a)
The
RC
PS-
iw
ill be
lis
ted
and
quot
ed o
n th
e M
ain
Mar
ket
of B
ursa
Se
curit
ies.
199
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
185(b
)Th
e N
ew O
rdin
ary
Sha
res
will
be li
sted
and
quo
ted
on th
e M
ain
Mar
ket o
f Bu
rsa
Sec
uriti
es.
20.T
rans
fera
bilit
yTh
e R
CP
S-i
shal
l be
tra
nsfe
rabl
e, s
ubje
ct h
owev
er t
o th
e ap
plic
able
law
s,
regu
latio
ns a
nd ru
les
that
wou
ld a
pply
to th
e se
curit
ies
of th
e C
ompa
ny.
21.G
over
ning
law
Law
s an
d re
gula
tions
of M
alay
sia.
22.R
atin
gTh
e R
CPS
-i w
ill b
e un
rate
d.”
To a
men
d Ar
ticle
10
of t
he A
rticl
es
of A
ssoc
iatio
n
“Not
with
stan
ding
Ar
ticle
11
he
reof
, th
e re
paym
ent
of
pref
eren
ce
capi
tal
othe
r th
an
rede
emab
le p
refe
renc
e ca
pita
l, or
an
y ot
her
alte
ratio
n of
pr
efer
ence
sha
reho
lder
s’ r
ight
s sh
all o
nly
be m
ade
purs
uant
to a
sp
ecia
l re
solu
tion
of
the
pref
eren
ce
shar
ehol
ders
co
ncer
ned,
pro
vide
d al
way
s th
at
whe
re th
e ne
cess
ary
maj
ority
for
such
a s
peci
al r
esol
utio
n is
not
ob
tain
ed a
t the
mee
ting,
con
sent
in
writ
ing,
if
obta
ined
fro
m t
he
hold
ers
of t
hree
-four
ths
(3/4
) of
th
e pr
efer
ence
cap
ital c
once
rned
w
ithin
tw
o (2
) m
onth
s of
th
e m
eetin
g, s
hall
be a
s va
lid a
nd
effe
ctua
l as
a sp
ecia
l res
olut
ion
carr
ied
at th
e m
eetin
g.”
“Not
with
stan
ding
Arti
cle
11 t
here
of,
the
repa
ymen
t of
the
RC
PS-i
shal
l be
in
acco
rdan
ce w
ith t
he
prov
isio
ns o
f Arti
cle
9.”
To a
men
d Ar
ticle
16
3 of
th
e Ar
ticle
s of
As
soci
atio
n
“Ano
tice
may
be
give
n by
the
C
ompa
ny t
o an
y M
embe
r ei
ther
pe
rson
ally
or
by s
endi
ng i
t by
po
st o
r by
cou
rier
to h
im a
t hi
s re
gist
ered
add
ress
as
appe
arin
g in
th
e R
ecor
dof
D
epos
itors
.
“ (a)
A
notic
e m
ay b
e gi
ven
by th
e C
ompa
ny to
any
Mem
ber e
ither
–
(i)pe
rson
ally
or b
y se
ndin
g it
by p
ost o
r by
cour
ier t
o hi
m a
t his
regi
ster
ed a
ddre
ss a
s ap
pear
ing
in
the
Rec
ord
of D
epos
itors
;
200
APP
END
IX V
AM
END
MEN
TS T
O O
UR
CO
NST
ITU
TIO
N (C
ont’d
)
186
Whe
re a
not
ice
is s
ent b
y po
st o
r by
cou
rier,
serv
ice
of t
he n
otic
e sh
all
be d
eem
ed t
o be
effe
cted
by
pr
oper
ly
addr
essi
ng,
prep
arin
g an
d po
stin
g a
lette
r co
ntai
ning
th
e no
tice,
an
d to
ha
ve b
een
effe
cted
in th
e ca
se o
f a
notic
e of
am
eetin
g on
the
day
afte
rth
e da
te o
f its
pos
ting,
and
in
any
oth
er c
ase
at t
he t
ime
at
whi
ch
the
lette
r w
ould
be
de
liver
ed in
the
ord
inar
y co
urse
of
pos
t. Th
e ac
cide
ntal
om
issi
on
to g
ive
any
notic
e of
any
mee
ting
to o
r the
non
-rec
eipt
of a
ny s
uch
notic
e by
any
of
the
Mem
bers
sh
all
not
inva
lidat
e th
e pr
ocee
ding
s at
an
y ge
nera
l m
eetin
g or
any
reso
lutio
n pa
ssed
th
erea
t.”
(ii)
by e
lect
roni
c fo
rm –
(1)
to a
n el
ectro
nic
mai
l add
ress
of a
Mem
ber w
ho h
as p
rovi
ded
such
add
ress
for t
he p
urpo
ses
of c
omm
unic
atio
n;
(2)
thro
ugh
Burs
a M
alay
sia
Dep
osito
ry S
dn B
hd o
r ot
her
third
par
ty p
ursu
ant t
o an
y el
ectro
nic
subs
crip
tion
serv
ices
pro
vide
d by
Bur
sa M
alay
sia
Dep
osito
ry S
dn B
hd o
r an
y el
ectro
nic
plat
form
pro
vide
d by
third
par
ties;
(3)
by w
ay o
f pub
licat
ion
on th
e C
ompa
ny’s
web
site
.
(b)
Whe
re a
not
ice
is s
ent b
y po
st o
r by
cour
ier,
serv
ice
of th
e no
tice
shal
l be
deem
ed to
be
effe
cted
by
prop
erly
add
ress
ing,
pre
parin
g an
d po
stin
g a
lette
r con
tain
ing
the
notic
e, a
nd to
hav
e be
en e
ffect
ed
in th
e ca
se o
f a n
otic
e of
am
eetin
g on
the
day
afte
r the
dat
e of
its
post
ing,
and
in a
ny o
ther
cas
e at
th
e tim
e at
whi
ch th
e le
tter w
ould
be
deliv
ered
in th
e or
dina
ry c
ours
e of
pos
t.
(c)
Whe
re a
not
ice
is s
ent i
n el
ectro
nic
form
, ser
vice
of t
he n
otic
e sh
all b
e de
emed
to b
e ef
fect
ed u
pon
trans
mis
sion
to th
e la
st k
now
n el
ectro
nic
mai
l add
ress
of t
he M
embe
r pr
ovid
ed th
e C
ompa
ny h
asre
cord
of
the
elec
troni
c co
mm
unic
atio
n be
ing
sent
and
doe
s no
t rec
eive
any
aut
omat
ed d
eliv
ery
failu
re n
otic
e af
ter
trans
mis
sion
of c
omm
unic
atio
n. A
ny n
otic
e by
way
of p
ublic
atio
n in
a w
ebsi
te
shal
l be
deem
ed s
erve
d if
it is
ser
ved
in a
ccor
danc
e w
ith s
ectio
n 32
0 of
the
Com
pani
es A
ct 2
016
and
List
ing
Req
uire
men
ts.
(d)
The
acc
iden
tal o
mis
sion
to g
ive
any
notic
e of
any
mee
ting
to o
r the
non
-rec
eipt
of a
ny s
uch
notic
e by
any
of t
he M
embe
rs s
hall
not i
nval
idat
e th
e pr
ocee
ding
s at
any
gen
eral
mee
ting
or a
ny re
solu
tion
pass
ed th
erea
t.” 201
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188202
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188203
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188204
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188205
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188206
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188207
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188208
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188209
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188210
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188211
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188212
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188213
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188214
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188215
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188216
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188217
APPENDIX VI
SHARIAH PRONOUNCEMENT LETTER (Cont’d)
188218
APPENDIX VII
FURTHER INFORMATION
200
1. RESPONSIBILITY STATEMENT
Our Board has seen and approved this Circular and they collectively and individually accept full responsibility for the accuracy of the information contained in this Circular and confirm that, after having made all reasonable enquiries and to the best of their knowledge and belief, there are no facts, the omission of which would make any statement in this Circular misleading.
2. CONSENT AND CONFLICT OF INTERESTS
2.1 Maybank IB
Maybank IB, being the Principal Adviser for the Proposals, has given and has not subsequently withdrawn its written consent to the inclusion of its name and all references thereto in the form and context in which it appears in this Circular.
Maybank IB and its related and associated businesses (“Maybank Group") form a diversified financial group and are engaged in a wide range of investment and commercial banking, brokerage, securities trading, asset and fund management and credit transaction services businesses. The Maybank Group has engaged and may in the future, engage in transactions with and perform services for our Group and/or any of our affiliates, in addition to the role set out in this Circular. In addition, in the ordinary course of business, any member of the Maybank Group may at any time offer or provide its services to or engage in any transaction (on its own account or otherwise) with any member of our Group, our shareholders, and/or our affiliates and/or any other entity or person, hold long or short positions in securities issued by our Company and/or our affiliates, and may trade or otherwise effect transactions for its own account or the account of its other customers in debt or equity securities or senior loans of any member of our Group and/or our affiliates. This is a result of the businesses of the Maybank Group generally acting independently of each other, and accordingly, there may be situations where parts of the Maybank Group and/or its customers now have or in the future, may have interest or take actions that may conflict with the interest of our Group. Nonetheless, the Maybank Group is required to comply with the applicable laws and regulations issued by the relevant authorities governing its advisory business, which require, among others, segregation between dealing and advisory activities and Chinese wall between different business divisions.
As at the LPD, our Group has existing credit facilities with the Maybank Group, of which RM4,491.1 million is outstanding. The said credit facilities have been extended by the Maybank Group in the ordinary course of business. The credit facilities include multi-currency term facilities granted by a group of domestic and foreign banks. The proceeds from the Proposed Rights Issue will be used to partly repay the amount due to lenders of the said multi-currency term facilities, of which not more than USD268.6 million (equivalent to RM1,123.8 million) will be repaid to the Maybank Group.
Maybank IB confirms that the aforesaid lending relationship would not give rise to a conflict of interest situation in its capacity as Principal Adviser for the Proposals as:
(i) the extension of credit facilities arose in the ordinary course of business of the Maybank Group;
(ii) the proceeds from the Proposed Rights Issue allocated for the repayment of the said multi-currency term facilities will be based on the loan outstanding amount to the respective domestic and foreign banks for the said tranches of the multi-currency term facilities in accordance with the terms and conditions of the respective facility agreements;
219
APPENDIX VII
FURTHER INFORMATION (Cont’d)
201
(iii) the conduct of the Maybank Group in its banking business is strictly regulated by the Financial Services Act, 2013, Islamic Financial Services Act, 2013 and the Maybank Group’s own internal controls and checks; and
(iv) the total outstanding amount owed by our Group to the Maybank Grouprepresents approximately 6.2% of the audited NA of the Maybank Group as at 31 December 2017 of RM73.0 billion.
Maybank IB confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Principal Adviser for the Proposals.
2.2 Independent Adviser
Mercury Securities, being the Independent Adviser for the Proposed Exemption, has given and has not subsequently withdrawn its written consent to the inclusion of its name, IAL and all references thereto in the form and context in which they appear in this Circular.
Mercury Securities confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Independent Adviser for the Proposed Exemption.
2.3 Shariah Adviser
Maybank Islamic, being the Shariah Adviser for the Proposed Rights Issue of RCPS-i,has given and has not subsequently withdrawn its written consent to the inclusion of its name and Shariah Pronouncement Letter and all references thereto in the form and context in which they appear in this Circular.
Maybank Islamic is a licensed Islamic bank and its appointment as the Shariah Adviser for the Proposed Rights Issue of RCPS-i is in its ordinary course of business. Maybank Islamic confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Shariah Adviser for the Proposed Rights Issue of RCPS-i.
3. MATERIAL COMMITMENTS AND CONTINGENT LIABILITIES
3.1 Material commitments
Save for capital expenditure for property, plant and equipment and expenditure on oil and gas properties approved and not provided for of RM528,768,000 as at 31 July 2018, our Board is not aware of any material commitments incurred or known to be incurred by our Group which may have a material impact on the profits and/or NA of our Group.
3.2 Contingent liabilities
Save for corporate guarantees given by our Group to financial institutions for credit facilities granted to joint ventures amounting to RM762.6 million as at the LPD, our Board is not aware of any contingent liabilities which, upon becoming enforceable, may have a material impact on the profits and/or NA of our Group.
220
APPENDIX VII
FURTHER INFORMATION (Cont’d)
202
4. MATERIAL LITIGATION
Save as disclosed below, as at the LPD, our Group is not engaged in any material litigation, claims or arbitration, either as plaintiff or defendant and our Board is not aware of any proceedings, pending or threatened, against our Group or of any facts likely to give rise to any proceedings which may materially affect the business or financial position of our Group:
(i) Sarku Engineering Services Sdn Bhd (“SESSB”)
On 20 February 2006, SESSB, a wholly-owned subsidiary of our Company, entered into a contract with Oil and Natural Gas Corporation Limited (“ONGC”) for the performance of works by SESSB to revamp 26 well platforms located at Mumbai High South field offshore site (“Contract”). On 21 September 2012, SESSB commenced arbitration proceedings against ONGC in relation to disputes arising from the Contract for a sum of INR1,063,759,201 and USD123,819,632 (including interest, costs, losses and damages). The claims by ONGC were made separately in two currencies as the claim is based on the rates and currencies prescribed in the Contract.
On 17 December 2012, ONGC has filed their reply to SESSB’s statement of claim. No counter claims have been filed by ONGC. Documents and witness statements have been filed.
Further examination in chief took place in January 2014 whereby revised list of documents were exchanged and has been taken on record. Cross examination of ONGC’s witness commenced in January 2015. The tribunal heard SESSB’s submission in January, February and May 2018 and new hearing dates have been fixed on 21 November 2018 to 23 November 2018.
SESSB has been advised by its solicitors that SESSB has a reasonable basis for its claim against ONGC.
(ii) Sapura Fabrication Sdn Bhd (“SFSB”)
On 18 March 2011, SFSB, a wholly-owned subsidiary of our Company, entered into a contract with Petrofac (Malaysia) Limited (“PML”) to provide works for the engineering, procurement and construction of well head platforms for the Cendor Phase 2 Development Project and the Cendor field located in Block PM 304 in the Malaysian sector of the South China Sea (“Contract 2”).
On 26 March 2018, SFSB received a commencement request from PML to formally initiate a claim by way of arbitration proceedings at the Asian International Arbitration Centre for damages amounting to a sum of USD14,743,541 and RM831,188 in relation to disputes arising from the Contract 2. PML has alleged breach of riser height requirements and preservation obligations by SFSB. The claim by PML was made separately in two currencies as the claim is based on the rates and currencies prescribed in the Contract 2.
On 26 April 2018, SFSB responded to PML’s claim and made a counterclaim for a total sum of RM11,023,719.56.
The arbitrators have been appointed and parties have attended the first arbitration meeting on 21 July 2018. PML has filed their Points of Claim on 21 September 2018 and SFSB is required to file its Defence and Counterclaim by 21 November 2018. The tentative hearing dates have been fixed on 23 September 2019.
SFSB has been advised by its solicitors that PML’s claim can be legally defended and SFSB has a reasonable basis for its counterclaim against PML.
221
APPENDIX VII
FURTHER INFORMATION (Cont’d)
203
(iii) Sapura Exploration & Production Inc (“SEP Inc”)
(a) On 11 February 2014, our Company and SEP Inc (collectively, “Sapura”) completed the acquisition of Newfield Malaysia Holdings Inc (currently known as SEP Malaysia) from Newfield International Holding Inc. and Newfield Exploration Company (collectively, “Newfield”). Arbitration proceedings between Sapura as claimants and Newfield as respondents arose out of the post-closing purchase price adjustments (“Adjustments”) and tax indemnity related to the acquisition.
On closing of the transaction, Sapura paid to Newfield a total of USD895.9 million for the acquisition, subject to adjustments. This amount was arrived at after taking into account certain items such as the estimated value of SEP Malaysia’s net working capital as at an agreed effective time (“ETNWC”).
After the closing of the transaction, Newfield delivered the final calculation of the adjusted purchase price to Sapura, claiming that Sapura owed Newfield an additional USD15,868,810 as a result of the adjustments.
Sapura in turn delivered its report on the changes that were necessary to properly calculate the final purchase price, claiming that during this process, it discovered that the preliminary estimate of the ETNWC did not match the agreed formulas. Sapura claimed that as a result of this discrepancy, the ETNWC adjustment was overvalued by approximately USD81.4 million. Sapura notified Newfield of this discrepancy, but Newfield refused to adjust the purchase price, claiming that the agreed numbers were fixed and final.
As the parties were unable to resolve the dispute, Sapura submitted a Request for Arbitration (“Request”) against Newfield on 19 October 2017 at the London Court of International Arbitration (“LCIA”), requesting the tribunal to set the final value of the adjustments and the final adjusted purchase price. Sapura also requested the tribunal to order Newfield to refund Sapura the amount by which the closing amount paid by Sapura exceeds the adjusted purchase price and indemnify Sapura for taxes which Sapura has paid on behalf of SEP Malaysia and award Sapura all damages, cost and equitable relief.
In its response to the Request (“Response”), Newfield has contested all of Sapura’s claims, arguing that the ETNWC was locked at the time of closing and thus is not subject to adjustment. In the Response, Newfield has also asserted its intention to cross-claim against Sapura, that: (1) Sapura owes Newfield RM34,048,008, which Newfield claims was its share of a tax refund received by SEP Malaysia for taxes paid in excess during the straddle period prior to completion of the acquisition; and (2) Sapura owes Newfield USD15,868,810 for post-closing adjustments to net intergroup advances and receipts.
The parties are at the initial disclosure stage and it is anticipated that final hearings on this matter will conclude on or around April 2019. Sapura has been advised by its counsels that it is difficult at the present stage to provide any opinion on the likely outcome of this matter.
(b) On 20 October 2017, in parallel and as a back-up to the arbitration proceedings disclosed in paragraph (a) above, SEP Inc filed an Original Petition and Application for Order at the Texas State Court (“Court”) pursuant to the Texas Civil Practice and Remedies Code (“Petition”) against Newfield International Holdings, Inc and Newfield Exploration Company (collectively, the ”Defendants”) and requested the Court to enter an order temporarily staying judicial proceedings on the claims pending the outcome of the arbitration in the LCIA.
222
APPENDIX VII
FURTHER INFORMATION (Cont’d)
204
On 18 December 2017, the Defendants responded to the Petition opposing the Petition in similar fashion to the arbitration proceedings.
The Court has officially stayed the case and there are no claims in this matter that are distinct from the claims raised in the LCIA. The litigation will only proceed if necessary after the conclusion of the arbitration proceedings.
5. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection at our registered office at Sapura@Mines, No. 7, Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia during normal business hours from Mondays to Fridays (except public holidays) from the date of this Circular up to and including the date of the forthcoming EGM:
(i) our Constitution;
(ii) audited consolidated financial statements of our Company for the past two (2) FYEs 31 January 2017 and 31 January 2018, and the latest unaudited consolidated financial statements of our Company for the six (6)-month period ended 31 July 2018;
(iii) letters of consent referred to in Section 2 of this Appendix;
(iv) the relevant cause papers in relation to the material litigation referred to in Section 4 of this Appendix;
(v) draft Deed Poll;
(vi) draft By-Laws; and
(vii) Shariah Pronouncement Letter as set out in Appendix VI of this Circular.
223
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting (“EGM”) of Sapura Energy Berhad (“SEB” or “Company”) will be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof for the purpose of considering and if deemed fit, passing with or without any modification, the following resolutions:
ORDINARY RESOLUTION 1
PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SEB (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED (“PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS”)
“THAT subject to the passing of Ordinary Resolutions 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of Shares with Warrants, approval be and is hereby given to the Board ofDirectors of the Company (“Board”) for the following:
(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 9,986,925,145 Rights Shares on the basis of five (5) Rights Shares for every three (3) SEB Shares held by the shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later by the Board (“Entitled Shareholders”) at an issue price of RM0.30 per Rights Share, together with up to 998,692,515 free Warrants on the basis of one (1) free Warrant for every ten (10) Rights Shares subscribed;
(b) enter into and execute the deed poll to govern the Warrants in relation to the Proposed Rights Issue of Shares with Warrants (“Deed Poll”) with full powers to assent to any conditions,variations, modifications and/or amendments from time to time, in accordance with and subject to the terms of the Deed Poll and in any manner as may be required by the relevant authorities or deemed necessary by the Board, and with full powers to implement and give effect to the terms and conditions of the Deed Poll and in the best interest of the Company;
(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of Shares with Warrants in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;
(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess Rights Shares with Warrants in a fair and equitable manner on a basis to be determined by the Board;
SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting (“EGM”) of Sapura Energy Berhad (“SEB” or “Company”) will be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof for the purpose of considering and if deemed fit, passing with or without any modification, the following resolutions:
ORDINARY RESOLUTION 1
PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SEB (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED (“PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS”)
“THAT subject to the passing of Ordinary Resolutions 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of Shares with Warrants, approval be and is hereby given to the Board ofDirectors of the Company (“Board”) for the following:
(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 9,986,925,145 Rights Shares on the basis of five (5) Rights Shares for every three (3) SEB Shares held by the shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later by the Board (“Entitled Shareholders”) at an issue price of RM0.30 per Rights Share, together with up to 998,692,515 free Warrants on the basis of one (1) free Warrant for every ten (10) Rights Shares subscribed;
(b) enter into and execute the deed poll to govern the Warrants in relation to the Proposed Rights Issue of Shares with Warrants (“Deed Poll”) with full powers to assent to any conditions,variations, modifications and/or amendments from time to time, in accordance with and subject to the terms of the Deed Poll and in any manner as may be required by the relevant authorities or deemed necessary by the Board, and with full powers to implement and give effect to the terms and conditions of the Deed Poll and in the best interest of the Company;
(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of Shares with Warrants in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;
(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess Rights Shares with Warrants in a fair and equitable manner on a basis to be determined by the Board;
(e) allot and issue such number of new SEB Shares to the holders of the Warrants, credited as fully paid-up, arising from the exercise of the Warrants; and
(f) use the proceeds from the Proposed Rights Issue of Shares with Warrants for such purpose and in the manner as set out in Section 7 of Part A of the circular to shareholders of the Company dated 7 November 2018 and the Board be authorised to revise the purpose and manner of the use of proceeds as it may deem fit or expedient, and in the best interest of the Company.
THAT the Warrants shall be allotted and issued in the registered form on the basis that, subject to any adjustments to the subscription rights attached to the Warrants under the provisions of the Deed Poll, each Warrant entitles its holder to subscribe for one (1) new SEB Share at an exercise price of RM0.49 per Warrant, during its prescribed exercise period;
THAT the Rights Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Rights Shares;
THAT the new SEB Shares to be issued arising from the exercise of the Warrants shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such new SEB Shares to be issued arising from the exercise of the Warrants;
AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Rights Issue of Shares with Warrants, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Rights Issue of Shares with Warrants.”
ORDINARY RESOLUTION 2
PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER (“PROPOSED RIGHTS ISSUE OF RCPS-i”)
“THAT subject to the passing of Ordinary Resolutions 1 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of RCPS-i, approval be and is hereby given to the Board for the following:
(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 2,396,862,035 new RCPS-i on the basis of two (2) RCPS-i for every five (5) SEB Shares held by the Entitled Shareholders at an issue price of RM0.41 per RCPS-i;
(b) allot and issue such number of new SEB Shares credited as fully paid-up pursuant to any conversion of the RCPS-i;
(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of RCPS-i in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;
(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess RCPS-i in a fair and equitable manner on a basis to be determined by the Board; and
(e) use the proceeds from the Proposed Rights Issue of RCPS-i for such purpose and in the manner as set out in Section 7 of Part A of the circular to shareholders of the Company dated 7 November 2018 and the Board be authorised to revise the purpose and manner of the use of proceeds as it may deem fit or expedient, and in the best interest of the Company.
THAT the RCPS-i shall rank equally amongst themselves, and will rank ahead in point of priority to the holders of the SEB Shares and all other classes of shares (if any) in the Company, in respect of payment out of the assets of the Company upon any liquidation, dissolution or winding-up of the Company, provided always that the Board approves such payment out of the assets of the Company on this basis and further affirms the priority of payment to the holders of the RCPS-i;
THAT the RCPS-i shall rank subordinated to all the Company’s creditors in respect of payment of debt and payment out of the assets of the Company upon liquidation, dissolution, or winding-up of theCompany;
THAT the new SEB Shares to be issued arising from the conversion of the RCPS-i shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such new SEB Shares to be issued arising from the conversion of the RCPS-i;
AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Rights Issue of RCPS-i, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Rights Issue of RCPS-i.”
ORDINARY RESOLUTION 3
PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD (“PNB”), AMANAH SAHAM BUMIPUTERA (“ASB”) AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITIONS (“RULES”) (“PROPOSED EXEMPTION”)
“THAT subject to the passing of Ordinary Resolutions 1 and 2 as well as the Special Resolution and the relevant approvals being obtained from the Securities Commission Malaysia (“SC”) and/or any other relevant authorities and/or parties (where applicable) including such conditions as may be imposed by the SC for the Proposed Exemption, approval be and is hereby given for PNB, ASB and persons acting in concert with them under the Rules to be exempted from the obligation to undertake a mandatory take-over offer to acquire all the remaining SEB Shares, Warrants and RCPS-i not already owned by them which would arise pursuant to the completion of the Proposed Rights Issue of Shares with Warrants and the Proposed Rights Issue of RCPS-i, the exercise of the Warrants during the tenure of the Warrants and/or the conversion of the RCPS-i, pursuant to Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules;
AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Exemption, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Exemption.”
ORDINARY RESOLUTION 4
PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”)
“THAT subject to the passing of Ordinary Resolutions 1, 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed ESOS, approval be and is hereby given for the Board to:
(a) establish and administer the Proposed ESOS which involves the granting of options (“ESOS Options”) to all eligible senior management and/or Executive Directors of the Company and its subsidiaries (excluding dormant subsidiaries) (“Participating SEB Group”) who meet the criteria of eligibility for participation in the Proposed ESOS set out in the by-laws of the Proposed ESOS (“By-Laws”) (“Eligible Persons”), which shall be administered by a committee to be appointed and duly authorised by the Board (“ESOS Committee”);
(b) allot and issue such number of new SEB Shares to the Eligible Persons from time to time as may be required for the purpose of or in connection with the implementation of the Proposed ESOS while this approval is in force provided that the aggregate number of SEB Shares to be allotted and issued shall not exceed 10% of the total number of issued SEB Shares (excluding treasury shares, if any) at any point in time throughout the duration of the Proposed ESOS;
(c) amend and/or modify all or part of the provisions of the By-Laws from time to time as may be required/permitted by the authorities or deemed necessary by the authorities or the Board or the ESOS Committee and to do all such acts, deeds and things as may be deemed fit, necessary, expedient and/or appropriate and to enter into all such transactions, arrangements and agreements as may be necessary, expedient and/or appropriate in order to give full effect to such modifications and/or amendments; and
(d) do all such acts, execute all such documents and to enter into all such transactions, arrangements and agreements, deeds and undertakings and to make such rules or regulations or impose such terms and conditions or delegate part of its powers as may be deemed necessary, expedient and/or appropriate in order to give full effect to the Proposed ESOS and terms of the By-Laws.
THAT the new SEB Shares to be allotted and issued upon exercise of the ESOS Options (“ESOS Shares”) shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such ESOS Shares;
AND THAT the By-Laws of the Proposed ESOS, a draft of which is set out in Appendix III of the circular to shareholders of the Company dated 7 November 2018 be and is hereby approved and adopted.”
ORDINARY RESOLUTION 5
PROPOSED GRANTING OF ESOS OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN (“PROPOSED GRANT”)
“THAT subject to the passing of Ordinary Resolutions 1, 2, 3 and 4 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Grant, the Board be and is hereby authorised at any time during the existence of the Proposed ESOS, to offer and grant to Tan Sri Dato’ Seri Shahril Shamsuddin, being an Executive Director of the Company, options to subscribe for up to 5% of the issued SEB Shares from time to time pursuant to the Proposed ESOS, subject to the following provisions:
(a) the allocation to him, where he either singly or collectively through person connected with him, holds 20% or more of the total number of issued SEB Shares (excluding treasury shares, if any), does not exceed 10% (or such percentage as allowable by the relevant authorities) of the SEB Shares to be issued under the Proposed ESOS; and
(b) he must not participate in the deliberation or discussion of his own allocation on the ESOS Options to be offered to him under the Proposed ESOS.”
SPECIAL RESOLUTION
PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB (“PROPOSED AMENDMENTS”)
“THAT subject to the passing of Ordinary Resolutions 1, 2 and 3 and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Amendments,the Proposed Amendments as set out in Appendix V of the circular to shareholders of the Company dated 7 November 2018 be hereby approved and adopted;
AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to the Proposed Amendments, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Amendments.”
BY ORDER OF THE BOARD
LEW SUE LI (MIA 42700) WONG LAY SEE (MAICSA 7018684) Company Secretaries Seri Kembangan, Selangor Darul Ehsan 7 November 2018
Notes:
(a) A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need not be a member of the Company and there is no restriction as to the qualification of the proxy.
(b) Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
(c) Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
(d) An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall be either under its common seal or signed by its attorney or an officer on behalf of the corporation.
(e) The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.
(f) Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll.
(g) For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.
(h) By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.
✄
PROXY FORM
Sapura Energy Berhad (Company No. 950894-T)
(Incorporated in Malaysia)
CDS Account No.
Total number of ordinary shares held
Number of ordinary shares to be represented by each proxy
Proxy 1 Proxy 2
I/We _______________________________________________________________________________________________________________ (Full Name as per NRIC/Passport/Certificate of Incorporation in Capital Letters)
NRIC No./Passport No./Certificate of Incorporation No. _______________________________________________________________
of _____________________________________________________________________________________________________ (Full Address)
being a Member of SAPURA ENERGY BERHAD, do hereby appoint_______________________________________________________
_______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. ______________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her,______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. _________________________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her, the CHAIRMAN OF THE MEETING, as my/our proxy to vote for me/us and on my/our behalf at the Extraordinary General Meeting (“EGM”) of the Company to be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof.
Please indicate with an “X” in the space provided below how you wish your vote to be cast. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his/her discretion.
Resolutions For Against
ORDINARY RESOLUTION 1 Proposed Rights Issue of Shares with Warrants
ORDINARY RESOLUTION 2 Proposed Rights Issue of RCPS-i
ORDINARY RESOLUTION 3 Proposed Exemption
ORDINARY RESOLUTION 4 Proposed ESOS
ORDINARY RESOLUTION 5 Proposed Grant
SPECIAL RESOLUTION Proposed Amendments
________________________________ Signature/Common Seal of Shareholder Dated this _______ day of ____________2018
NOTES: 1. A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need
not be a member of the Company and there is no restriction as to the qualification of the proxy. 2. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the
Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy. 4. An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall
be either under its common seal or signed by its attorney or an officer on behalf of the corporation. 5. The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan
Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.
6. Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll. 7. For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the
Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.
8. By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.
PROXY FORM
Sapura Energy Berhad (Company No. 950894-T)
(Incorporated in Malaysia)
CDS Account No.
Total number of ordinary shares held
Number of ordinary shares to be represented by each proxy
Proxy 1 Proxy 2
I/We _______________________________________________________________________________________________________________ (Full Name as per NRIC/Passport/Certificate of Incorporation in Capital Letters)
NRIC No./Passport No./Certificate of Incorporation No. _______________________________________________________________
of _____________________________________________________________________________________________________ (Full Address)
being a Member of SAPURA ENERGY BERHAD, do hereby appoint_______________________________________________________
_______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. ______________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her,______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. _________________________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her, the CHAIRMAN OF THE MEETING, as my/our proxy to vote for me/us and on my/our behalf at the Extraordinary General Meeting (“EGM”) of the Company to be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof.
Please indicate with an “X” in the space provided below how you wish your vote to be cast. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his/her discretion.
Resolutions For Against
ORDINARY RESOLUTION 1 Proposed Rights Issue of Shares with Warrants
ORDINARY RESOLUTION 2 Proposed Rights Issue of RCPS-i
ORDINARY RESOLUTION 3 Proposed Exemption
ORDINARY RESOLUTION 4 Proposed ESOS
ORDINARY RESOLUTION 5 Proposed Grant
SPECIAL RESOLUTION Proposed Amendments
________________________________ Signature/Common Seal of Shareholder Dated this _______ day of ____________2018
NOTES: 1. A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need
not be a member of the Company and there is no restriction as to the qualification of the proxy. 2. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the
Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy. 4. An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall
be either under its common seal or signed by its attorney or an officer on behalf of the corporation. 5. The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan
Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.
6. Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll. 7. For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the
Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.
8. By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.
PROXY FORM
Sapura Energy Berhad (Company No. 950894-T)
(Incorporated in Malaysia)
CDS Account No.
Total number of ordinary shares held
Number of ordinary shares to be represented by each proxy
Proxy 1 Proxy 2
I/We _______________________________________________________________________________________________________________ (Full Name as per NRIC/Passport/Certificate of Incorporation in Capital Letters)
NRIC No./Passport No./Certificate of Incorporation No. _______________________________________________________________
of _____________________________________________________________________________________________________ (Full Address)
being a Member of SAPURA ENERGY BERHAD, do hereby appoint_______________________________________________________
_______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. ______________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her,______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)
NRIC No./Passport No. _________________________________________________________________________________________________
of __________________________________________________________________________________________________________________ (Full Address)
or failing him/her, the CHAIRMAN OF THE MEETING, as my/our proxy to vote for me/us and on my/our behalf at the Extraordinary General Meeting (“EGM”) of the Company to be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof.
Please indicate with an “X” in the space provided below how you wish your vote to be cast. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his/her discretion.
Resolutions For Against
ORDINARY RESOLUTION 1 Proposed Rights Issue of Shares with Warrants
ORDINARY RESOLUTION 2 Proposed Rights Issue of RCPS-i
ORDINARY RESOLUTION 3 Proposed Exemption
ORDINARY RESOLUTION 4 Proposed ESOS
ORDINARY RESOLUTION 5 Proposed Grant
SPECIAL RESOLUTION Proposed Amendments
________________________________ Signature/Common Seal of Shareholder Dated this _______ day of ____________2018
NOTES: 1. A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need
not be a member of the Company and there is no restriction as to the qualification of the proxy. 2. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the
Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy. 4. An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall
be either under its common seal or signed by its attorney or an officer on behalf of the corporation. 5. The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan
Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.
6. Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll. 7. For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the
Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.
8. By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.
AFFIXSTAMP
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Then fold here
1st fold here
Fold this flap for sealing -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Then fold here ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
AFFIXSTAMP
SHARE REGISTRAR OF SAPURA ENERGY BERHAD
Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46, 47301 Petaling Jaya Selangor Darul Ehsan Malaysia
1st fold here ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------