KUALA LUMPUR: Hengyuan Refining Company Bhd (Hengyuan) is set to raise up to RM300 million through a proposed renounceable rights issue of up to 300 million new ordinary shares, together with up to 150 million free detachable warrants.
In a statement, Hengyuan said the exercise will be on the basis of one rights share for every one existing Hengyuan share held and one warrant for every two rights shares subscribed for, at an issue price and entitlement date to be determined later.
It said Hengyuan’s major shareholder, Malaysia Hengyuan International Ltd (MHIL), which holds 51.02 per cent of the company’s issued shares, has undertaken to subscribe to its full entitlement.
“This commitment secures a minimum fundraising of RM155 million from the exercise,” the company said.
According to Hengyuan, the bulk of proceeds from the rights issue will be channelled towards the purchase of additional crude oil feedstock, the primary raw material used in refining and manufacturing petroleum products.
“Maintaining adequate feedstock levels is expected to improve production efficiency, lower unit costs per barrel, and strengthen overall competitiveness,” it said.
Its chief financial officer, Yeo Bee Hwan, said the proposed rights issue will provide the company with the working capital to secure additional feedstock and support operational efficiency, while also strengthening its equity base and financial flexibility.
Supported by its major shareholder and the progress of the company’s strategic initiatives, Yeo said Hengyuan is targeting a return to profitability by 2026.
“Subject to achieving profitability, the company will also consider the resumption of dividends in the future, as set out in its 2024 annual report,” she added.
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