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KUALA LUMPUR (September 22): surprising and unexpected. Both words sum up analyst sentiment today after Sapura Energy Bhd announced yesterday that its group chairman and chief executive, Tan Sri Shahril Shamsuddin, plans to retire.
Maybank Investment Bank Bhd (Maybank IB) analyst Liaw Thong Jung wrote in a note today that while this corporate move is an unexpected surprise, Sapura Energy’s debt refinancing and cost reduction exercises remain top priorities. key oil and gas support service provider.
“A surprise market move, in terms of time,” Liaw said.
AmInvestment Bank Bhd analyst Alex Goh wrote in a note today AmInvestment is surprised by Shahril’s planned retirement, as Sapura Energy, which started as a diving contractor, has been part of the group of companies started by the family of Shahril.
“Furthermore, he did not give any indication of his retirement during a briefing with analysts last Friday,” Goh said.
Yesterday, Sapura Energy announced in a statement that Shahril plans to retire after leading the group for 25 years. The group said Shahril will step down on his 60th birthday on March 22, 2021.
“The board of directors of Sapura Energy has appointed Datuk Mohd Anuar Taib as COO and appointed CEO effective October 1, 2020, as part of a six-month transition,” the company said.
Today, Maybank IB’s Liaw said that in the opinion of the research firm, the recapitalization of Sapura Energy is urgently needed for the company’s survival.
“Sapura Energy is highly leveraged, with 1x net leverage and 15x net debt / EBITDA. We do not rule out another round of cash calls to recapitalize its balance sheet,” the analyst said.
AmInvestment’s Goh said that Sapura Energy’s huge debt of roughly RM10 billion still needs to be rolled over with 14 banks by December 2020.
He said this “could mean an additional capital raising exercise in the pipeline that will result in massive dilution (earnings per share) given the current low share price.”
At the time of writing this theedgemarkets.com report today, Sapura Energy had not issued a statement in response to analysts’ speculation about another round of cash calls and additional capital increase at the company.
In today’s Bursa Malaysia 12:30 pm break, Sapura Energy’s share price was set unchanged at 12 sen, bringing the company’s market capitalization to approximately RM1.92 billion. Some 54 million shares changed hands.
Maybank IB maintained its option to “sell” the Sapura Energy shares with an unchanged TP price of six sen, according to Liaw.
Goh said AmInvestment maintained its option to “sell” Sapura Energy with an unchanged TP of five sen.
Read also:
Sapura Energy boss Shahril Shamsuddin will pass the baton on to Anuar Taib in March 2021
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