UMW announces proposal to list its oil & gas business
Shah Alam, 16 May 2013 – UMW Holdings Berhad ("UMWH" or Company") announced today that it proposes to list its wholly-owned subsidiary, UMW Oil & Gas Corporation Berhad ("UMW-OG"), on the Main Market of Bursa Malaysia Securities Berhad ("Bursa Securities").
In this regard, UMW-OG proposes to undertake the following:
(i) an initial public offering ("IPO") of up to 843,180,000 ordinary shares of RM0.50 each in UMW-OG ("UMW-OG Shares"), comprising an offer for sale of up to 231,380,000 UMW-OG Shares and a public issue of 611,800,000 new UMW-OG Shares to retail and institutional investors ("Proposed IPO"); and
(ii) the listing of and quotation for its entire enlarged issued and paid-up share capital of RM1,081,000,000 comprising 2,162,000,000 UMW-OG Shares on the Main Market of Bursa Securities ("Proposed Listing").
The Company also intends to undertake an internal reorganisation which involves the transfer of the offshore drilling business and certain companies in the oilfield services division under UMWH and its subsidiaries ("UMWH Group") to UMW-OG prior to the Proposed IPO and Proposed Listing. Accordingly, UMW-OG had on 14 May 2013 entered into sale and purchase agreements in relation to the internal reorganisation with UMWH Group.
Upon completion of the internal reorganisation, UMW-OG and its existing and proposed subsidiaries and proposed associated company ("UMW-OG Group") will be principally involved in the upstream sector of the oil and gas industry, providing offshore drilling and oilfield services which includes engineering and maintenance services.
Under its drilling services business, UMW-OG Group provides offshore drilling and workover services with its fleet of four (4) offshore drilling rigs and four (4) hydraulic workover units ("HWUs") that it operates in Malaysia and other parts of South East Asia. UMW-OG Group operates and jointly owns one (1) semi-submersible drilling rig, namely Naga 1, as well as wholly owns and operates three (3) premium jack-up drilling rigs, namely Naga 2, Naga 3 and Naga 4. UMW-OG Group is also a PETRONAS-licenced provider of HWU services and is the sole Malaysian-owned drilling contractor owning and operating HWUs. In addition, UMW-OG also acts as an agent in Malaysia for international companies providing specialised drilling equipment and services.
Under its oilfield services business, UMW-OG Group has operations in Malaysia, Thailand, China and Turkmenistan, providing oil country tubular goods ("OCTG") threading, inspection and repair services focused on premium connections. In Malaysia, the UMW-OG Group provides these services at two plants located in Labuan. In Thailand, the UMW-OG Group provides premium threading, inspection and related workshop services at its plants in Songkhla and Sattahip. In China, UMW-OG Group offers similar services, as well as premium accessories threading, at its plant in Tianjin. In Turkmenistan, UMW-OG Group's workshop in Turkmenbashy provides OCTG threading, inspection and repair services. The UMW-OG Group's oilfield services business also offers engineering and maintenance services as a customised equipment packager and a total solution provider for power generators and other equipment used in the oil and gas market.
UMWH's President and Group CEO, Datuk Syed Hisham bin Syed Wazir said, "The proposed listing of UMW-OG is a key strategic initiative by UMWH which is expected to accelerate the growth of the oil and gas business within the UMWH Group and enable UMWH to unlock and crystallise the value of its investment in the UMW-OG Group and enhance the shareholders' value at UMWH level." Additionally, the proceeds from the offer for sale will enable UMWH to reduce its existing borrowings thus further improving its capital structure and providing further flexibility for UMWH to raise funds for other strategic purposes such as earnings accretive acquisitions.
The Proposed Listing would also further enhance UMW-OG Group's profile, increase its visibility as one of the leading oil and gas companies in Malaysia and enable a wider base of investors to participate in the future performance of the UMW-OG Group. The proceeds from the public issue will also provide UMW-OG with the financial resources to pursue growth opportunities.