PUTRAJAYA: Carimin Petroleum Bhd, enroute to a listing on Bursa Malaysia’s Main Market on Nov 10 with an offer price of RM1.10, is not concerned about the slide in crude oil prices, deeming the current downtrend as a short-term correction.
Its managing director Mohktar Hashim (pic) is of the view that the fall in oil prices is temporary and that it’s more important to look at the company’s fundamentals.
“Many have questioned the timing of our listing, but we see this [drop in oil prices] as short term,” he told reporters after the launch of Carimin’s prospectus yesterday.
Brent oil prices have dropped 27.19% to US$83.78 (RM274) per barrel on Oct 15 from US$115.06 per barrel in September this year. The commodity was trading at US$85.03 per barrel at the time of writing.
“Our group has grown in the last 25 years and we have RM900.8 million work value for hook up and commissioning (HUC), and manpower supply that will last for the next five years,” Mokhtar said.
Carimin, which provides offshore HUC, platform maintenance services, and professional manpower supply for the oil and gas (O&G) industry, is bidding for RM800 million worth of jobs to date in the local market, according to Mokhtar.
Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said in a keynote address yesterday that in terms of timing, many have asked whether this was the right time to launch an initial public offering (IPO) for an O&G firm given the low oil prices at this moment.
“If a company focuses on the fundamentals, anytime will be a good time,” said Abdul Wahid, echoing Mokhtar’s sentiments.
He highlighted that if looking from an investor’s point of view, “this is a good time to go into the O&G sector as it provides much better upsides after the recent fall of oil prices.”
Carimin plans to raise RM66.8 million from the IPO. Of this, RM35.3 million will be utilised for the acquisition of accomodation workboat Carimin Acacia, RM12 million for upgrading the group’s fabrication yard in Kemaman, RM8 million for repayment of bank borrowings, RM8 million for working capital, and the remaining RM3.5 million to defray listing expenses.
The IPO entails a public issue of 60.7 million new shares, of which 11.7 million shares will be allocated for the public while three million shares are for eligible directors and employees. Another 46 million shares will be allocated through private placement to identified investors.
The 5.9 million shares under the offer-for-sale will be allocated by way of private placement to identified investors.
Based on Carimin’s IPO price of RM1.10 a share and expanded share base of 233.88 million shares after listing, the company will have a market capitalisation of RM257.27 million.
On another note, Abdul Wahid said Carimin would be the first listing under the revamped Skim Jejak Jaya Bumiputera (SJJB) programme, which provides assistance to qualified bumiputera companies for listing on the Bursa Malaysia.
SJJB, which is jointly undertaken by the Bumiputera Agenda Steering Unit or Teraju (in the Prime Minister’s Department) and Ekuiti Nasional Bhd, aims to increase overall market capitalisation of bumiputera-controlled public-listed companies with a target of between RM7 billion and RM10 billion by 2016.
Apart from Carimin, Abdul Wahid noted that another existing SJJB company, E A Technique Bhd, is also expected to be listed on Bursa by year-end.
This article first appeared in The Edge Financial Daily, on October 24, 2014.