MY: Shipping group MISC to buy back 50% stake in firm it sold to Petronas, at 46% premium

MISC website.

Shipping group MISC Bhd is buying back the remaining 50 per cent equity interest in Gumusut-Kakap Semi-Floating Production System Ltd (GKL) for $445 million (MYR1.88 billion) from its parent company Petroliam Nasional Bhd (Petronas).

The purchase price indicates a 46 per cent premium to the price tag at which it sold the stake to the national oil company three years ago. The sharp depreciation of the Malaysian Ringgit weighed on the purchase price, doubling the numbers in the local currency term.

The Edge Financial Daily reported that some market observers noted that the proposed buy-back of the asset is a form of MISC returning the favour to its parent company as Petronas struggles with the depressed crude oil prices.

To recap, MISC disposed off 50 per cent of its equity interest in GKL, the owner of a semi-submersible floating production system installed in Sabah, to E&P Venture Solutions Co Sdn Bhd (EPV) for $305.7 million to Petronas in December 2012.

EPV is a wholly-owned unit of Petronas Carigali Sdn Bhd, owned by Petronas, which also holds a 62.67 per cent equity interest in MISC.

The disposal enabled MISC to pare down its debt and strengthened its financials during an industry downturn.

In a filing with Bursa Malaysia on Wednesday, MISC said it had entered into a conditional share purchase agreement with EPV to acquire the 50 per cent equity interest in GKL.

MISC said the proposed acquisition represents a good opportunity for MISC to fully own an asset that is under a long-term lease with a strong client, which is a subsidiary of an international oil and gas company.

The group also noted that the acquisition will allow it to gain full control of GKL and consolidate its future earnings as it becomes MISC’s wholly-owned subsidiary.

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