Sapura Energy shareholders reject resolution allowing directors to allot and issue shares

Published on 31 Jul 2020. | Source: theedgemarkets.com

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KUALA LUMPUR (July 30): Sapura Energy Bhd’s shareholders rejected a resolution to allow its directors to allot and issue shares.

At its annual general meeting (AGM) today, 114 shareholders holding a 63.52% stake in the company voted against the resolution, compared with 501 shareholders owning the remaining 36.48% in the company who voted in favour of the proposal, which would allow its board to issue up to 10% of the company's total shares as at today.

Its shareholders' refusal to grant its board the ability to issue and allot shares places another challenge on its fundraising capability.

According to the notice of its 9th AGM dated June 30, the renewal of the mandate to allow directors to issue shares under Sections 75 and 76 of the Companies Act 2016 would enable them to "take swift action in case of a need for corporate exercises or funds raising activities or in the event business opportunities arise which involve issuance of new shares and to avoid delay and cost in convening general meetings to approve such issuance of shares".

"Proceeds raised from the corporate exercises or funds raising activities will be utilised for funding future investment projects, working capital and/or acquisitions," it said.

Permodalan Nasional Bhd is the largest shareholder in Sapura with a 40% stake in the company, while Sapura's president and chief executive officer Tan Sri Shahril Shamsudin holds a 12.82% stake.

For its first financial quarter ended April this year, Sapura posted a net profit of RM14.2 million from RM1.36 billion in revenue, thanks to foreign exchange gains of RM33.91 million.

A year ago, it posted a net loss of RM109.1 million against RM1.63 billion in revenue.

The oil & gas giant had posted 10 straight unprofitable quarters, accumulating losses of RMM4.46 billion. Its long-term borrowings amounted to RM7.29 billion, compared with its cash and cash equivalents of RM710.97 million as at April 30, translating to gearing of 1.5 times.

At the market close, Sapura remained at 10 sen, with a market capitalisation of RM1.52 billion. The stock saw some 169.55 million shares traded.