Thursday, May 3, 2012

Perdana Petroleum/Petra Perdana… dated April 2012

Sources say IPIC, a wholly owned by the government of the Emirate of Abu Dhabi, is said to be the strongest contender for the block of 57.7 million shares put up for sale.

Other parties interested in the stake is a Sawarak based family belived to be involved in the oil and gas and shipping business. It is well connected to the federal government and it is also known to the major shareholder of Petra Energy, which is Shorefield Resources.

Shorefield’s entry into Petra Energy was about rm1.91 per share. Petra Energy’s net assets per share stood at rm1.57 as at Dec 31, 2011. If Shorefield Resources’ entry price is used as a benchmark, it would be tough for sale to be conducted at the April 2012 price.

Shorefield would likely emerge as one of the potential suitors for Perdana's 26.9% stake in Petra Energy.

If Shorefield is successful in its bid for Perdana's entire remaining stake in Petra Energy, a general offer would be triggered. Shorefield already owns a 27.27% stake in Petra Energy. The company also owns 25% of Perdana. Perdana's proposal to sell its entire stake in Petra Energy would be instrumental in cleaning up its financial and operations, which would subsequently attract potential suitors.

It has to be more than the net assets per share and somewhere close to Shorefield Resources’ rm1.91 entry price.

The reason for Perdana Petroleum wanting to dispose of its shareholding in Petra Energy is due to the fact that it needs to monetize its assets to pare down borrowings. As at 31 Dec 2011, Perdana Petroleum had long term borrowings of rm175 million and short term borrowings stood at rm100 million. It also extended corporate guarantees to the tune of rm349 million to its subsidiaries and third parties. It has two bond payments of RM35mil each, due in September 2012 and March 2013, respectively.

Perdana Petroleum’s cash and cash equivalents stood at rm67 million.

It posted losses in its FY2011 ended 31. The losses incurred were mainly due to the fall in charter rates for oil and gas support vessels and the loss in revenue after Petra Energy became an associate following the 30% disposal to Shorefield Resources.

Perdana Petroleum Bhd's proposed divestment of its entire stake in Petra Energy Bhd will pave the way for the former to restructure its own financials and operations.

The stake sale will raise substantial cash for Perdana amd expect the company to use it to settle some outstanding loans, particularly those that will be due in the second half of 2012 to the early part of 2013.

Perdana Petroleum needs to monetize its assets to pare down some of its more pressing liabilities. Its cash flow has been dwindling ever since it disposed of 30% of its stake in Petra Energy in 2008.

Petra Energy is one of the few companies that offer immediate exposure to the big leagues in the oil and gas industry. It has existing contracts with Petronas and Shell and is bidding for more as a hook up and commission contractor. Also to be noted is that Perdana petroleum is unlikely to dispose of the stake at much lower than the rm1.91 per share that Shorefield Resources paid for.

1 comment:

agricultural investments said...

I think IPIC will win. The governments of the GCC countries have unlimited resources.

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