KUALA LUMPUR: Sumatec Resources Bhd will raise about RM900 million from the capital market and investment banks to buy oil and gas (O&G) assets in Kazakhstan and expand the facilities.
The company, which is 24.9 per cent owned by businessman Tan Sri Halim Saad, is buying Borneo Energy Oil and Gas Ltd for US$250 million (RM795.8 million) in cash and shares.
Borneo Energy owns 100 per cent of Buzachi Neft LLP, which has two 25-year subsoil use contracts, valid until November 2026, to explore and produce O&G in Karaturun Vostochnyi and Karaturun Morskoi fields, also known as the Buzachi Fields.
Sumatec chief executive officer Chris Dalton expects the acquisition to be completed by September.
He said Sumatec will undertake a rights issue this year to raise some US$125 million for the assets and issue bonds worth up to US$150 million to expand the facilities and build new infrastructure.
Sumatec will also issue special shares valued at US$125 million to shareholders of Borneo Energy.
Borneo Energy is controlled by Murat Safin from Kazakhstan and Abu Talib Abdul Rahman, who is associated to Halim and has a 0.6 per cent interest in Sumatec.
“Due diligence has started and we plan to take over the assets towards the end of this year, followed by fund-raising exercises. The asset acquisition and facility expansion will cost around US$400 million.
“We have zero gearing now and with the fund-raising exercises, our gearing level should be around 1.1, which is manageable,” Dalton said at a briefing, here, yesterday.
He expects contribution from the Buzachi Fields to be immediate as there are five wells in production.
The fields have 68 million barrels of oil reserves.
