KUALA LUMPUR (Aug 14): T7 Global Bhd has secured the approval of Bursa Securities to proceed with a 20% private placement exercise to partially fund its on-going projects.

In a statement today, the oil and gas service provider said the exercise will raise up to RM42 million and will be utilised for three on-going projects.

On July 1, T7 Global had proposed to undertake the private placement, encompassing the issuance of up to 117 million new shares, or 20% of the group's issued shares.

The shares will be put out to third party investor(s) to be identified at a later stage.

The proceeds from the private placement will be used for project working capital on Carigali Hess Operating Co Sdn Bhd’s contract for the provision of onshore fabrication, offshore hook-up and commissioning for infill flowlines, as well as another contract for provision of supply of systems and equipment. These two contracts have a provision value of RM140 million.

The remaining of the proceeds from the private placement is to part-finance the engineering, procurement, construction, installation and commissioning of a mobile offshore production unit (MOPU) for a 10-year contract by Petronas Carigali Sdn Bhd for its Bayan Redevelopment Project Gas Phase 2.

"The group requires substantial capital consumption for the next 12 months where we have been thoroughly planning our cashflow and assets for these projects since the launch of Bayan MOPU project in February and other projects in the second and third quarter of 2020," Datuk Seri Nik Norzrul Thani Nik Hassan Thani, chairman of T7 Global, said.

"This placement will further strengthen the group’s financial position as we foresee that the group is expected to preserve working capital for future new contracts," he added.

At 2.41pm, T7 Global shares traded down 1.5 sen or 3.8% at 38 sen, with 992,000 shares changing hands. Its market capitalisation was at RM202.1 million.