Indonesian tycoon plans reverse takeover of KeyWest

Business Times understands that KN Kenanga is helping to structure the deal in which Yanki Regan and people aligned to him will initiate a reverse takeover of KeyWest.


KUALA LUMPUR: Yanki Regan, Indonesia’s multi-level marketing (MLM) magnate, plans to take control of Key West Global Telecommunications Bhd (KeyWest), bankers helping broker the deal said yesterday.

Business Times understands that KN Kenanga Bhd is helping to structure the deal in which Yanki and people aligned to him will initiate a reverse takeover of KeyWest.

Malaysia-born Yanki helped build PT Citra Nusa Insan Cemerlang (CNI) some 27 years ago to become the second largest MLM company in Indonesia.

Yanki is the executive chairman of CNI International,
which has interest in Singapore, India, Taiwan, China, Hong Kong and Brunei.



Apart from his interest in CNI Indonesia, Yanki is also the chairman and chief executive officer of Sepang Goldcoast Sdn Bhd, the company that runs Golden Palm Tree Resort and Villas and the Sepang Bay development project in Sepang, Selangor.

For the venture to take control of KeyWest, it is understood that Yanki is using PT Formasi Sumatera Energi as his vehicle.

Formasi Sumatera, a special purpose vehicle, has rights to an Indonesian oil field with an estimated reserve of 50 million barrels of oil.

Formasi Sumatera’s oil field in Palembang, Indonesia, is already producing between 500 and 800 barrels of oil a day.

A banker who visited the oil field last month said that it is an onshore oil field, and, therefore, the cost of extracting the oil is much less that pumping oil from offshore sites.

“I would say it’s a marginal field, but for a company like KeyWest, it is indeed a big deal,” said the banker, adding that KeyWest might issue some convertible bonds as part of the whole deal.

Issuing convertible bonds would need regulator approval and as such, the banker said, it would take at least two to three weeks for the whole structure of the deal to be approved.

Convertible bonds are a hybrid security with debt-and equity-like features, which carries additional value through the option to convert the bonds to stocks, thereby participating in further growth in a company’s equity value.

Yanki will probably inject part of Formasi Sumatera as part of an equity injection plus cash purchase in order to take control of KeyWest.