KUALA LUMPUR (Sept 13): Dagang Nexchange Bhd (DNeX) has proposed a private placement to raise up to RM133.44 million as funding for the expansion of its oil and gas segment.

This is DNeX's first private placement since 2021, In 2021, when it placed 30% of its issued share capital then to raise RM163.61 million following its venture into SilTerra Malaysia Sdn Bhd. 

The latest fundraising is to fund the development of the Fyne Field in UK's North Sea, the Meranti Cluster offshore Terengganu and the A Cluster offshore Miri, Sarawak, DNeX said.

DNeX in 2021 raised its stake in Ping Petroleum Ltd to 90%, from 30%, with a price tag of US$78 million (RM314 million at the time). Earlier this year, it signed two production sharing contracts with Petronas for the two Malaysian assets. It owns 60% interest in the Meranti Cluster, while it holds another 70% in A Cluster.

In a filing to Bursa Malaysia, the company said the private placement entails the issuance of up to 315.63 million shares, representing 10% of its total issued share of 3.15 billion.

For illustrative purposes, the indicative issue price for the exercise is assumed to be 41.5 sen per placement share, which represents a discount of approximately 9.98% to the five-day volume weighted average price (VWAP) of DNeX shares based on the latest share price of 46.1 sen per share.

The exercise will not be placed for interested directors, major shareholders or chief executives of DNeX or a holding company, persons connected with an interested person and nominee corporations.

The fund raised via the exercise will be used for strategic acquisition and collaboration in the oil and gas/energy segment, particularly in upstream and downstream, the company said. This segment contributed 27% or RM399.90 million of its total revenue of RM1.46 billion in 2022, it said. 

For the first half of its financial year 2023 (1HFY2023), DNeX's loan and borrowings stood at RM43.79 million, against RM86.58 million in 1HFY2022. It reported cash and cash equivalents RM417.43 million for the period, down 44% from RM754.52 million posted a year ago.

The company's largest shareholder is Mohd Isa Ismail, who holds 14.42% indirect stake, followed by Foxconn Technology Group via 3.8% held by Foxconn Singapore Pte Ltd.

DNeX’s shares closed unchanged at 45 sen per share on Wednesday, valuing the company at RM1.40 billion.