Marco Polo Marine (MPM) plans to boost its shareholding Indonesian shipping company Pelayaran Nasional Bina Buana Raya (BBR) to a majority stake through a rights issue.
MPM currently holds a 34.8% stake in the company, held through wholly-owned subsidiary Marco Polo Indonesia (MPI).
MPI will participate in BRR’s rights issue, providing an undertaking to BBR to fully subscribe for all its rights entitlements under the rights issue, as well as any excess rights entitlements arising from the renouncement by two other substantial shareholders of BBR and the remaining public shareholders, subject to a maximum aggregate subscription amount of US$17 million ($22.6 million).
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Following the rights issue, MPI’s interest in BRR will increase up to 72% - subject to the level of acceptance from other shareholders - making it the majority shareholder of BRR.
According to a filing to SGX dated May 24, given the time-sensitive nature of the undertaking and the support of its major shareholders who hold a combined 52.2% of voting rights, MPM sought and obtained a waiver from SGX which allowed it to participate in the rights issue without convening an extraordinary general meeting first.
Sean Lee, MPM’s CEO, points out that participation in the rights issue will not have any adverse impact on MPM’s balance sheet following BBR’s debt restructuring exercise in 2020. “The restructuring has allowed BBR to restart with a clean slate, and coupled with the rights issue and debt conversion, it will enable BBR to recapitalise its balance sheet and maintain financial stability going forward,” he says.
“BBR provides the group with the platform to expand its presence in the Indonesian market. Accordingly, it is in the interest of the group to ensure that its shareholding in BBR (held through MPI) was not diluted,” Lee adds.
MPM states that through BBR, the company will be able to offer its customised solutions to meet the needs of the offshore oil and gas sector.
Shares in MPM closed 0.1 cents or 4.76% lower at 2 cents on May 21.
