KUALA LUMPUR (Oct 7): Propel Global Bhd (KL:PGB) is selling an indirectly-owned 70% stake in oil and gas (O&G) services firm Propel Maxflo Sdn Bhd to the Reservoir Link Bhd (KL:RL), in return for RM13.79 million cash, and a 4.44% additional stake in Reservoir Link.

The deal, which values the 70% stake at RM17.24 million, will up Propel Global's interest in Reservoir Link to 14.26% from 9.82%, as Reservoir Link will issue 18.69 million new shares at 18.5 sen apiece or RM3.45 million to Propel Global, on top of the cash payment.

Propel Global's 49%-owned unit Propel Oilfield Services Sdn Bhd inked an agreement with Reservoir Link on Tuesday for the transaction, bourse filings from both Propel Global and Reservoir Link on Tuesday showed. The exercise will be completed by the end of this year.

The deal will result in Propel Maxflo being a wholly owned subsidiary of Reservoir Link, who had previously acquired 30% in Propel Maxflo for RM7.39 million.

Reservoir Link said the acquisition will allow it to fully consolidate Maxflo’s operations while providing a strategic platform to penetrate the Middle East market through Maxflo’s existing relationships in Saudi Arabia and Bahrain.

It also sees Maxflo as a launchpad for expansion into the United Arab Emirates, Oman and Qatar, particularly in enhanced oil recovery and well intervention technologies.

Propel Global said the proposed disposal would enable the group to unlock and realise the value of its remaining investment in Maxflo at a premium to its carrying amount, in exchange for cash proceeds and a higher equity interest in Reservoir Link.

Separately, Propel Global proposed a capital reduction exercise to cancel RM65.5 million of its share capital to offset its accumulated losses.

The group’s issued share capital currently stands at RM138.1 million comprising 733.64 million shares. Following the exercise, it will be reduced to RM72.6 million. As at end-June 2025, the group’s accumulated losses amounted to RM13.2 million.

In addition, Propel Global proposed a private placement of up to 146.7 million new shares — representing about 20% of its issued share base — to raise as much as RM10.78 million, mainly for project expenditure and repayment of bank borrowings.

On Tuesday, Reservoir Link’s shares fell half a sen or 2.44% to close at 20 sen, valuing the group at RM70.76 million. Propel Global’s shares closed unchanged at seven sen, giving the group a market capitalisation of RM52.22 million.