IPO Reach Energy to finalise asset buy within 'reasonable time'
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IPO Reach Energy to finalise asset buy within 'reasonable time'
IPO Reach Energy to finalise asset buy within 'reasonable time' |
Business & Markets 2014 |
Written by Jonathan Gan of theedgemalaysia.com |
Thursday, 26 June 2014 16:10 KUALA LUMPUR (June 26): Reach Energy Bhd, which is targeting to raise RM750 million from its initial public offering (IPO), plans to finalise acquisition of an oil and gas asset within a "reasonable time", according to Chief Financial Officer Azmi Arshad. Reach Energy is a special purpose acquisition company (SPAC) focusing on upstream oil and gas assets. Azmi said gauging from positive market response to Reach Energy's IPO, he was convinced the firm would hit the target, given the group's clear business strategies, strong management team, high investor protection and sizeable funding. He said these factors would enable Reach Energy to "comfortably complete a qualifying acquisition within a reasonable time". Reach Energy is set to become the largest SPAC on Bursa to date, following the IPO. Reach Energy is the fourth oil and gas SPAC to be listed on Bursa Malaysia after Hibiscus Petroleum Bhd, Cliq Energy Bhd and Sona Petroleum Bhd. Azmi was speaking to reporters after the signing of an underwriting agreement with Hong Leong Investment Bank Bhd and its custodian agreement signing with Amanahraya Trustees Bhd. The company obtained the green light from SC on June 19, 2014 for its listing exercise. The IPO entails a public issue of one billion new shares together with a similar number of free detachable warrants. “We are attracting a lot of interest from institutional, high net-worth and retail investors for our IPO exercise and the interest has picked up even more since we received approval from the Securities Commission,” said Azmi. Azmi said company would place 94.75% or RM710.62 million of the IPO proceeds in an Islamic trust account, while investors would be able to enjoy an eight-year free detachable warrants as a sweetener. “Investors should be comforted by the 94.75% in which the company has put in the trust account,” said Azmi. Managing Director Shahul Hamid Mohd Ismail said the company would likely be listed in August. Post listing, the company planned to achieve its objective of becoming an independent exploration & production company with global operations. |
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