MISC Wants it Right

With the strong support from state-owned oil and gas company Petroliam Nasional Berhad (“Petronas”), MISC has announced last week that it plans to raise up to RM 5.2 billion (USD 1.5 billion) via a renounceable rights issue. Petronas, which currently owns 62.67% of MISC, has agreed to subscribe its entitlement in full in proportion to its shareholdings and will take up additional rights shares, should these shares remained unsubscribed by other entitled shareholders.

744 million new ordinary rights issues which represent 16.7% of the enlarged share capital will be sold to existing shareholders on the basis of one rights share for every five existing ordinary MISC shares at an issue price of RM 7.00 a piece. The issue price is a discount of approximately 18% from the theoretical ex-rights price of RM 8.53 based in the 5-day volume weighted average market price of MISC shares up to an inclusive of 20 November 2009. The rights shares will rank pari-passu with all existing MISC shares.

Proceeds will be used for capital expenditure to partially finance projects for floating production systems. MISC says the proposed rights issue will allow the company to raise new capital without diluting existing shareholders’ shareholdings and at the same time lower its debt-equity ratio from 0.57 to 0.45. MISC has currently total borrowings of RM 11.8 billion (USD 3.5 billion).

The offering managed by sole advisor RHB Investment Bank is expected to be closed by the first quarter of 2010.

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