MISC proposes rights issue to raise RM5.2b

MISC Bhd (3816), the world's largest carrier of liquefied natural gas (LNG), plans to raise RM5.2 billion in a rights issue to finance capital expenditure in the domestic and international markets.

MISC said it would issue 743.97 million rights shares at RM7 apiece, a discount of 18 per cent to the five-day volume weighted average market price of its shares up to and inclusive of last Friday of RM8.83.

It will issue one rights share for every five existing shares held.

In its filing to Bursa Malaysia yesterday, MISC said proceeds from the proposed issue will be used to part-finance projects for floating production systems in both the domestic and international markets.
Petroliam Nasional Bhd, which owns 63 per cent of the shipping firm, will take up its pro rata entitlement, and could back the entire rights issue if other shareholders do not subscribe, MISC said.

It also proposed the merger of its local and foreign shares quoted and listed on the Main Market of Bursa Malaysia and an increase in its authorised capital to RM10 billion from RM5 billion.

Following the proposed merger of local and foreign shares, the entire issued and paid-up capital of MISC will be quoted under the local counter.

MISC said the proposed increase in authorised capital was to accommodate any new MISC shares that might be issued in future corporate exercises.

Meanwhile, the group saw an 81 per cent decline in second quarter net profit to RM82.1 million from a year ago, due mainly to lower profit in its petroleum business and higher losses experienced by its liner and chemical units.

Revenue in the quarter ended September 30 2009 fell 20 per cent to RM3.53 billion.

First half earnings and sales were down 67 per cent and 8.4 per cent to RM315.51 million and RM7.42 billion respectively.

MISC has proposed to return to shareholders an interim dividend of 15 sen a share.

In a statement, MISC said the contraction of global trade continued to pose challenges to the shipping industry, as seen in the falling rates for petroleum, chemical and container shipping.

"(However) the liner business segment is expected to show further results improvement with the group's exit from the Grand Alliance (a group of four ocean carriers) in the final quarter of this financial year. The group's earnings from long-term charters in the LNG and offshore businesses will also help to cushion the group from the downward pressure on rates," it added.

MISC shares closed down 1 sen at RM8.80 yesterday.