KUALA LUMPUR, June 16 (Bernama) -- CN Asia Corp Bhd has announced a series of proposals to raise funds for its proposed diversification into the downstream oil and gas (O&G) industry, which includes the production of liquefied petroleum gas (LPG) and condensate.
The maker of tanks and pressure vessels said it had inked a central processing complex (CPC) agreement with Tan Sri Halim Saad-controlled company Markmore Energy (Labuan) Ltd (MELL) and CaspiOil Gas LLP for an O&G project in Kazakhstan.
This involves setting up a CPC plant and the first pipeline at the Rakushechnoye oil and gas field in Kazakhstan to produce LPG and condensate as well as processing and producing natural gas extracted from the field.
“First pipeline” refers to pipelines to be installed and owned by CN Asia to transport the natural gas from the point of delivery to the CPC plant.
The proposed gas processing involves the undertaking by CN Asia to pay MELL a sum of US$150 million (US$1=RM4.61) to be satisfied via cash, shares and/or issuance of redeemable convertible preference shares (RCPS).
CN Asia has also undertaken to raise and procure the total construction cost for the design, construction and commissioning of the proposed CPC plant and first pipeline amounting to US$285 million.
In conjunction with the proposed gas processing, the board has proposed to undertake a private placement, renounceable rights issue with warrants, issuance of shares and issuance of RCPS. The proceeds will then be used to fund the payments required under the CPC agreement.
CN Asia said the proposed private placement would involve 73.40 million new ordinary shares, representing about 30 per cent of the total existing number of placement shares in the company.
The board also proposed a 13-for-1 renounceable rights issue of up to 4.54 billion CN Asia shares together with up to 907.03 million free detachable warrants to be issued on the basis of one warrant for every five rights shares subscribed.
In addition, CN Asia proposed to issue 1.21 billion ordinary shares at 19 sen each as well as the same number of RCPS at 19 sen each to MELL.
It said the proposals were expected to be completed by the first quarter of 2024.
-- BERNAMA
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