KUALA LUMPUR (Jan 9): SEB Upstream Sdn Bhd (SUP), a joint venture between Sapura Energy Bhd and OMV Aktiengesellschaft (OMV AG), plans to obtain financing facilities from local and foreign financial institutions and/or its Austrian partner for between US$350 million (RM1.46 billion) and US$550 million (RM2.29 billion) to repay part of its debt and for working capital.
Sapura Energy said it may be required to provide corporate guarantees, undertakings and/or securities for half of the financing facilities to be obtained by SUP.
In a filing with Bursa Malaysia today, Sapura Energy said SUP will use US$350 million to partially repay the amount owing by it to Sapura Energy of US$890 million (RM3.7 billion) and the rest for working capital.
"In the event the OMV financing is provided pursuant to the subscription agreement, the financing will be provided by OMV Exploration & Production GMBH (OMV E&P) or another entity within OMV AG group to the SUP group for an amount of US$350 million and would require Sapura Upstream Assets Sdn Bhd to pledge SUP shares of an equity value, at closing, of US$175 million as security in favour of OMV E&P or another entity within OMV AG group," Sapura Energy said.
"However, other than for the OMV financing, the actual quantum of such corporate guarantees, undertakings and/or securities to be provided by Sapura Energy Group cannot be determined at this juncture," it added.
The proposed financial assistance is subject to the approval of Sapura Energy shareholders to be obtained at the same extraordinary general meeting to be convened for the proposed transaction.
"The proposed financial assistance is to be undertaken after the completion of the proposed transaction, which is expected to be completed by the first quarter of 2019," Sapura Energy added.
OMV had agreed to pay US$540 million to Sapura Energy for a 50% stake in SUP, in a deal signed on Nov 8 last year. It had also committed to repaying the US$350 million worth of shareholders’ loans owed by SUP to Sapura Energy, plus an additional US$55 million, as well as contingency funds of up to US$30 million in relation to Sapura’s Block 30 exploration asset in Mexico.
Sapura Energy shares closed up 0.5 sen or 1.69% at 30 sen today, giving it a RM4.79 billion market capitalisation.