KUALA LUMPUR (April 19): Uzma Bhd plans to raise RM68.35 million via a private placement of 15% of its current share base to help fund the development of a water injection facility (WIF) which it is to lease to a unit of Hibiscus Petroleum Bhd.

The upstream oil and gas (O&G) service provider plans to issue up to 58.08 million shares to third-party investors at an issue price to be fixed later, according to a bourse filing on Friday. 

However, the group’s RM68.35 million estimate is based on an illustrative issue price of RM1.1768 per share, a 9.99% discount to Uzma shares’ five-day volume-weighted average price up to April 3.

Uzma has earmarked RM61.65 million of proceeds to partly fund the commissioning and construction of the WIF, while RM5 million will be for repaying bank borrowings and the rest for the exercise’s expenses.

It reasoned that the private placement enables the group to raise funds to support its business expansion and enable interest savings in a more expeditious and cost-effective manner, as opposed to other fundraising options. 

Back in February this year, Uzma’s wholly owned unit Uzma Engineering Sdn Bhd secured a contract from SEA Hibiscus Sdn Bhd, an indirect wholly owned unit of Hibiscus Petroleum Bhd, to provide for a lease of a WIF for SF30 Waterflood Phase 2.

SF30 Waterflood Phase 2 is the second phase of a project to inject water into the reservoir of an oilfield, to maintain or increase reservoir pressure to avoid pressure depletion in the reservoir over a period of time.

The contract’s value was not disclosed in Uzma’s bourse filing.

Meanwhile, Uzma noted that it completed a private placement of 35.2 million shares in July last year, that raised proceeds of RM21.47 million, which went towards the development of its 50-megawatt (MW) solar plant project under the fourth round of the Large Scale Solar (LSS4) programme. 

Kenanga Investment Bank Bhd has been appointed as the adviser and placement agent for the proposed private placement. 

Subject to requisite approvals, the private placement is expected to be completed by the second quarter of 2024. 

Shares in Uzma ended one sen or 0.78% lower at RM1.28 on Friday, valuing the company at RM495.65 million.