KUALA LUMPUR, 19 January 2017 - UMW Oil & Gas Corporation Berhad (“UMW-OG”) and Ekuiti Nasional Berhad (“Ekuinas”), through its investment vehicles, are pleased to announce that they have entered into two separate share purchase agreements (“SPAs”) to consolidate their oil & gas businesses under UMW-OG.

Under the SPAs executed between the parties, UMW-OG will acquire Ekuinas’ indirect stake of approximately 42.3% in Icon Offshore Berhad (“ICON”) for new UMW-OG shares, and 95.5% interest in Orkim Sdn Bhd (“Orkim”) for cash, respectively. ICON is the largest pure play owner and operator of offshore support vessels (“OSV”) in Malaysia, while Orkim is the owner and operator of the largest clean petroleum product (“CPP”) marine transportation vessels in the country.

Upon completion of the SPA relating to ICON, Ekuinas will emerge as an approximately 12.6% shareholder in UMW-OG, second only to Permodalan Nasional Berhad (“PNB”) and funds under its management (collectively, “PNB & Funds”), which is expected to hold a direct interest in UMW-OG of approximately 40% (following the proposed demerger of UMW-OG from UMW Holdings Berhad as announced earlier today). Following this, UMW-OG will undertake a mandatory take-over offer for all the remaining shares of ICON at a consideration of RM0.50 a share to be satisfied either via cash or issuance of new UMW-OG shares at RM0.80 a share. UMW-OG intends to secure full acceptance to reap the benefits of consolidation and does not intend to maintain the listing status of ICON.

The enlarged oil & gas businesses under UMW-OG will lead to the creation of a major integrated service provider across the oil & gas value chain, comprising 7 jack-up rigs, 1 semi-submersible rig, 5 hydraulic workover units (“HWU”), 37 OSVs, 14 CPP and 2 liquefied petroleum gas (“LPG”) marine transportation vessels, respectively. With the newly acquired fleet of assets across the value chain, the enlarged UMW-OG will be in a position to benefit from the expected recovery of activities in the sector through its interests in offshore drilling rigs, HWUs and OSVs, and improved earnings profile through Orkim’s long term contracted cash flows.

Upon completion of the consolidation exercise, UMW-OG will embark on a recapitalisation exercise via a rights issue of approximately RM1.8bn. To this end, Ekuinas has indicated its support for the recapitalisation plan, up to RM550mm, comprising its entitlement and application of excess rights shares (“Ekuinas Support”). UMW-OG intends to procure a similar support from its major shareholders, namely PNB & Funds. The Ekuinas Support, together with PNB & Funds’ entitlement after the UMW-OG demerger, would in aggregate amount to approximately RM1.3bn or more than 70% of the rights issue, if subscribed. UMW-OG will pursue underwriting arrangements for the remaining portion.

Commenting on the transaction, Rohaizad Darus, President of UMW-OG, said, “This exercise aims to create a major integrated offshore service provider with diversified earnings through exposure in the upstream and downstream segment of the oil & gas industry. The recapitalisation exercise would strengthen our balance sheet and enhance our competitiveness to ride on the expected recovery of the industry. The merger of the three companies is also timely in answering Petronas’ call for consolidation of Malaysian oil & gas industry.”

Syed Yasir Arafat Syed Abd Kadir, Chief Executive Officer of Ekuinas, said, “We are firm believers in the call for consolidation in the oil & gas sector, and are pleased with this transaction that aims to achieve just that. While the industry has gone through some rough patches in recent times, the outlook is improving, thus providing an opportune time for us to pursue the consolidation exercise. The transaction enables us to crystallise our investments and at the same time participate in and increase our commitment through injection of fresh capital via consolidation. This demonstrates our belief in the longer term prospects of the industry, and particularly, the new UMW-OG.”

The transaction is subject to various conditions, including but not limited to lenders’ consent and UMW-OG’s shareholders’ approval. Barring unforeseen circumstances, the transaction is expected to complete in Q3 2017.

On another note, UMW-OG has also announced the appointment of Dato’ Abdul Rahman Ahmad as its Deputy Chairman.