Sumatec up on rumours of Halim Saad increasing stake

by **Cals** Fri 15 Aug 2014, 23:08

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Friday, 15 August 2014 09:21

KUALA LUMPUR: Share in Sumatec Resources Bhd hit a five-year intra-day high of 56.5 sen yesterday on talk of its largest shareholder Tan Sri Halim Saad increasing his foothold in the oil and gas outfit, and that it is closer to exiting its Practice Note 17 status.

According to sources, Halim is looking to increase his stake in Sumatec to 32% from 24.63% currently. This is just slightly under the 33% level that would trigger a mandatory general offer (MGO).

“Sumatec had recently completed a private placement of up to 308.6 million new shares in the firm to independent third-party investors. This will result in Halim’s stake being diluted to some 20%.

“As such, he is looking to increase his stake in the company by up to 32% without triggering an MGO,” a source told The Edge Financial Daily.

Sumatec’s stock has jumped 113.46% to close up one sen or 1.85% at 55 sen yesterday from 26 sen on June 17 this year, after hovering between 26 sen and 33.5 sen since the beginning of the year. Its market capitalisation stood at RM1.92 billion.

Sumatec, which moved into the O&G sector in 2012, proposed a private placement exercise in January to fund the company’s planned acquisitions of oil and gas (O&G) fields in Kazakhstan.

The private placement was completed following the listing of and quotation of 308.6 million new shares of 14 sen each in Sumatec on Aug 5. The company will raise some RM85 million from the exercise.

To recap, Sumatec signed a gas development and production agreement with Markmore Energy (Labuan) Ltd (MELL) last year, allowing Sumatec to develop and deliver to MELL the gas development, implementation and production plan that will meet the minimum supply requirement of 120 million standard cu ft (MMSCF) of gas per day to a commercial off-taker by 2017.

It is worth noting that MELL is a wholly-owned subsidiary of Markmore Sdn Bhd, whose directors are Halim and Abu Talib Abdul Rahman. Halim owns a 99.99% stake in Markmore.

Earlier in March 2013, Sumatec inked a joint investment agreement with MELL and CaspiOilGas LLP, which has the rights to develop and extract O&G at the Rakushechnoye onshore oil field in Kazakhstan until 2025.

As part of the deal, Markmore will pay Sumatec US$15 million (RM47.7 million) per year to execute the design of the wells, starting from January this year until 2016.

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This article first appeared in The Edge Financial Daily, on August 15, 2014.
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