KUALA LUMPUR (Nov 12): Affin Hwang Capital Research has upgraded Sapura Energy Bhd (SAPE) to “Hold” at 32 sen with a higher target price of 35 sen after SAPE finalised its divestment deal structure last Friday with regards to its upstream assets to Austria’s OMV.

In a note today, the research house said this deal would see the set-up of a JV company, valuing it at an enterprise value of US$1.6 billion, which is in line with its existing forecast.

“Post deal, SAPE will receive up to US$975 million which will mostly be utilised to pare down the current RM16.9 billion group debt.

“With earnings looking bottomed, rights issue and divestment exercises expected to be completed by 1Q19, we upgrade SAPE to a Hold with higher target price at 35 sen (from 32 sen) as downside risk looks limited from current level,” it said.