Hibiscus plans to raise RM210m via CRPS (5199)

Hibiscus Petroleum Bhd has proposed to issue Convertible Redeemable
Preference Shares (CRPS) to raise up to RM210 million to fund future
acquisitions of oil and gas assets.

It expects to acquire assets
that are in the development and/or production stage of their lifecycle
and meet pre-defined financial investment criteria.

In a
statement, Hibiscus Petroleum said it signed separate conditional
subscription agreements with four parties, including existing
shareholders, Sri Inderajaya Holdings Sdn Bhd and Lionel Lee Chye Tek,
for the subscription of CRPS amounting to a total of RM52.5 million.

The agreements are conditional upon Hibiscus Petroleum obtaining all the necessary approvals.

The
four investors have the option (exercisable during the relevant
conversion period) to convert the CRPS at conversion prices that range
between RM1.81 and RM1.85 which represent premiums of between 7.5 per
cent and 10 per cent over the 5-day volume weighted average market
price (VWAMP) of Hibiscus

Petroleum shares immediately before the date of the conditional subscription agreements.

The
percentage premium to the conversion prices accorded to the respective
investors is based on the quantum of CRPS subscribed, it said.

The
balance of up to RM157.5 million in CRPS will be issued in multiple
tranches to private investors, who will be identified over the next few
months.

Hibiscus Petroleum's Managing Director, Dr Kenneth
Pereira said the Hibiscus Petroleum CRPS instrument is to be issued at
a premium as Hibiscus Petroleum had incorporated various safeguards and
features (including redemption provisions and a conversion option) to
make it attractive to investors.

He said the safeguards assure
investors that funds will be placed with an independent custodian and
will only be disbursed by the independent custodian to the company
after verification by an external expert that the minimum project
investment criteria have been met or when the CRPS have been converted.

Another
key feature of the CRPS is that if more than 20 per cent of the
proceeds raised from issuance of all tranches of CRPS remain unutilised
on the seventeenth month from the date of issue of the first CRPS
tranche, investors have a one-time option to redeem the balance CRPS
they hold based on a formula which incorporates a five per cent premium
per annum.

However, if the balance proceeds are less than or
equal to 20 per cent of the proceeds raised, the redemption option
shall not be applicable, and the conversion of the remaining CRPS into
Hibiscus Petroleum shares becomes mandatory at maturity date on the
eighteenth month.

The CRPS are not tradable but it allows the
investors to convert their CRPS into Hibiscus Petroleum shares upon the
share price reaching RM3 per share or six months after the first
tranche of CRPS has been issued, whichever is earlier. -- Bernama