KUALA LUMPUR (Sept 27): Oil and gas services provider Propel Global Bhd (KL:PGB) has proposed a private placement to raise up to RM8.25 million for business expansion and working capital for new projects.
The fundraising exercise involves an issuance of up to 67.59 million new ordinary shares, representing approximately 10% of its issued shares, at an issue price to be determined later.
Propel Global said the private placement will provide additional financial flexibility to support the group’s growth ambitions without incurring interest-bearing debt.
Separately, the group is acquiring a 39% stake in its majority-owned subsidiary Best Wide Engineering (M) Sdn Bhd (BWE) for RM6.19 million, raising its shareholding to 90% from 51%.
BWE operates within the oil and gas industry, specialising in engineering, procurement, construction and commissioning (EPCC) services for new plants and refurbishment of plants, as well as design and supply of skidded process systems for onshore plants and offshore platforms.
Propel Global, through its wholly-owned subsidiary Propel Oilfield Services Sdn Bhd (POSSB), on Friday entered into a share sale agreement to acquire the stake in BWE, utilising the put and call option agreement signed earlier with shareholders of the company.
By increasing its stake in BWE, Propel Global aims to fully capitalise on future profit growth and expand its market presence in both onshore and offshore oil and gas operations.
The proposed acquisition will also enable the group to have a higher share of future profits gained by BWE, it added.
"Acquiring the remaining stake in BWE allows us to enhance our core business and fully leverage its growth potential. Propel Global remains focused on driving sustainable growth and delivering value to our stakeholders as we continue to strengthen our position in the industry," its group chief executive officer Angeline Lee said in a statement on Friday.
Propel Global’s shares closed 0.5 sen or 4.17% higher at 12.5 sen on Friday, giving the group a market capitalisation of RM80.96 million.