KUALA LUMPUR: The merged entity between SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd will allocate RM1.4 billion as capital expenditure over the next two years.
Speaking at a media briefing after the SapuraCrest EGM yesterday, group president and CEO Datuk Seri Shahril Shamsuddin said the capex would be used for expansion into Australia, Brazil and the Middle East.
He said the merged entity to be named Sapura Kencana Bhd will have an order book of about RM13 billion upon the merger. SapuraCrest’s order book is currently around RM4 billion to RM5 billion, he said.
At the EGM, Shahril said 99.5% of SapuraCrest’s shareholders are in favour of the proposed merger with Kencana.
Shareholders also approved SapuraCrest’s proposed acquisition of Australia-based Clough Ltd’s marine construction and offshore engineering operations in Australia, the UK and US for RM409 million in cash. Shahril said Clough will start contributing to SapuraCrest immediately as it has contracts in hand of over RM1 billion.
Clough’s acquisition has now given SapuraCrest the capabilities to lay flexible pipelines and umbilicals for deepwater projects, said Shahril.
Post merger, Shahril said the immediate task is to integrate the workforce between the two companies. This will be the focus for the first three to five months, he said, adding that SapuraCrest and Kencana plan to increase their skilled workforce by 15% to 20%.
At the same time, both companies will also streamline their operations upon the merger. “We will start by putting the businesses that overlap into single business units. We will then make sure they run efficiently,” said Shahril.
He said the merger will allow SapuraCrest to become a fully integrated oil and gas services company, with an expanded suite of services that include engineering, procurement, construction, installation and commissioning (EPCIC) capabilities.
“We are able to go to the oil companies and offer them a one-stop shop,” he said, adding that there are only three to five companies globally that are able to do this.
With a combined balance sheet, he said SapuraCrest and Kencana will be able to take on larger projects. “It is very difficult for a company with a RM100 million paid-up [capital] to bid for a RM10 billion job,” he said.
The combined balance sheet of both companies will have a gearing of 1.1 times and RM1.3 billion cash. The merger was announced in July.
Under a cash and share swap deal, Integral Key Bhd (IKB), a special purpose vehicle, will acquire all assets and liabilities of SapuraCrest for a total consideration of RM5.87 billion, equivalent to RM4.60 per share. The total consideration is to be distributed to shareholders by the first quarter of 2012 when the merger is expected to be completed with the listing of IKB.
As for Kencana, IKB was offering RM5.98 billion or RM3 per share. Kencana will hold its EGM today for the approval of the merger.
SapuraCrest closed nine sen higher to RM4.41 yesterday with 4,324,700 shares transacted.
This article appeared in The Edge Financial Daily, December 15, 2011.
Speaking at a media briefing after the SapuraCrest EGM yesterday, group president and CEO Datuk Seri Shahril Shamsuddin said the capex would be used for expansion into Australia, Brazil and the Middle East.
He said the merged entity to be named Sapura Kencana Bhd will have an order book of about RM13 billion upon the merger. SapuraCrest’s order book is currently around RM4 billion to RM5 billion, he said.
At the EGM, Shahril said 99.5% of SapuraCrest’s shareholders are in favour of the proposed merger with Kencana.
Shareholders also approved SapuraCrest’s proposed acquisition of Australia-based Clough Ltd’s marine construction and offshore engineering operations in Australia, the UK and US for RM409 million in cash. Shahril said Clough will start contributing to SapuraCrest immediately as it has contracts in hand of over RM1 billion.
Clough’s acquisition has now given SapuraCrest the capabilities to lay flexible pipelines and umbilicals for deepwater projects, said Shahril.
Post merger, Shahril said the immediate task is to integrate the workforce between the two companies. This will be the focus for the first three to five months, he said, adding that SapuraCrest and Kencana plan to increase their skilled workforce by 15% to 20%.
At the same time, both companies will also streamline their operations upon the merger. “We will start by putting the businesses that overlap into single business units. We will then make sure they run efficiently,” said Shahril.
Shahril: We are able to go to the oil companies and offer them a one-stop shop.
He said the merger will allow SapuraCrest to become a fully integrated oil and gas services company, with an expanded suite of services that include engineering, procurement, construction, installation and commissioning (EPCIC) capabilities.
“We are able to go to the oil companies and offer them a one-stop shop,” he said, adding that there are only three to five companies globally that are able to do this.
With a combined balance sheet, he said SapuraCrest and Kencana will be able to take on larger projects. “It is very difficult for a company with a RM100 million paid-up [capital] to bid for a RM10 billion job,” he said.
The combined balance sheet of both companies will have a gearing of 1.1 times and RM1.3 billion cash. The merger was announced in July.
Under a cash and share swap deal, Integral Key Bhd (IKB), a special purpose vehicle, will acquire all assets and liabilities of SapuraCrest for a total consideration of RM5.87 billion, equivalent to RM4.60 per share. The total consideration is to be distributed to shareholders by the first quarter of 2012 when the merger is expected to be completed with the listing of IKB.
As for Kencana, IKB was offering RM5.98 billion or RM3 per share. Kencana will hold its EGM today for the approval of the merger.
SapuraCrest closed nine sen higher to RM4.41 yesterday with 4,324,700 shares transacted.
This article appeared in The Edge Financial Daily, December 15, 2011.
