Tuesday, 16 December 2014

The edge: Hibiscus’ shareholders raised interest, says MD

KUALA LUMPUR: Key shareholders of junior oil and gas exploration company Hibiscus Petroleum Bhd have increased their shareholding since its initial public offering (IPO) in 2011, said managing director Dr Kenneth Pereira.

Pereira, in a written response to a story published by The Edge this week, noted that Hibiscus’ top nine shareholders have been raising their interest in the company since its listing to 67% currently.

According to data presented by Pereira and collected from Bloomberg, as of yesterday, through Hibiscus Upstream Sdn Bhd, the company’s management team held an 18.75% interest in Hibiscus. Its shareholdings rose from an initial 83.61 million shares post-IPO to 167.22 million shares currently.

Several other shareholders in the private oilfield services sector and an investor in technology companies have also accumulated their shareholdings in Hibiscus after its listing in 2011. According to Bloomberg, current substantial shareholders of Hibiscus include Mercury Pacific Marine Pte Ltd (8.17%), Littleton Holdings Pte Lte (5.99%) and Chye Tek Lee (5.06%), among others. Note that Chye is the group chief executive officer and managing director of Singapore-listed Ezra Holdings Limited and also non-executive chairman of EMAS Offshore Limited.

Yesterday, Hibiscus announced to Bursa Malaysia that Datuk Sri Muhammad Syafiq Baljit Abdullah increased his shareholding to 12.78% by acquiring 4.12 million shares from three transactions between Dec 8 and 12, making him the company’s second-largest shareholder. Hibiscus shares shed 6.32% yesterday to close at 89 sen a share, translating into a market capitalisation of RM793.6 million. Year-to-date, the stock has fallen 49.17%.

The story in The Edge highlighted accumulating losses at Hibiscus which may have contributed to the stock’s recent poor performance.

“It is well known and widely reported that the share prices of oil and gas companies have been adversely affected by the slide in oil prices, both in Malaysia and worldwide. We do not understand the grounds for stating that the share price decline is due to accumulating losses when other oil and gas companies are also suffering from price declines,” said Pereira.

He also noted that Hibiscus’ share price has been resilient, substantiated by the fact that even with a 99.6% warrant conversion rate in July 2014, the company’s market capitalisation has been reasonably stable.
Meanwhile, Pereira also emphasised that Hibiscus had drilled two wells from November 2013 to February 2014, culminating in the first offshore discovery in the east of Oman after almost 40 years of exploration in the region by several other companies.

“Our 50% success rate in exploration drilling is significantly higher than the global average, where approximately one out of seven wells are successful,” said Pereira.

This article first appeared in The Edge Financial Daily, on December 16, 2014.

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