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New Straits Times - Reaching For The Sky
REACH Energy Bhd, a small oil and gas (O&G) company, made history in August when it became the largest special-purpose acquisition company (SPAC) to be listed on the Main Market of Bursa Malaysia with an initial public offering (IPO) of RM750 million.
The listing came on the back of three other SPACs, namely Sona Petroleum Bhd, Cliq Energy Bhd and Hibiscus Petroleum Bhd, which raised RM550 million, RM364 million and RM235 million, respectively.
SPACs have no income-generating business prior to the IPO but undertake listing for the purpose of raising funds to acquire businesses or assets, otherwise known as qualifying acquisition (QA).
Reach Energy’s IPO was oversubscribed by 41.86 times. There were 23,821 applications for 857.295 million public issue shares, thus making it one of the stronger stocks to debut on the Main Market this year.
Among its cornerstore buyers were Norway’s Norges Bank Investment Management, Koperasi Permodalan Felda Malaysia Bhd and Lembaga Tabung Haji, which signify the industry’s confidence in the firm.
The story is just beginning for Reach Energy but with such a strong opening, the market can expect greater things to come from the company, especially since it is helmed by industry expert Shahul Hamid Mohd Ismail as managing director and chief executive officer.
The 64-year-old has been in the O&G industry for the past 36 years. He was first with mega player Exxon and moved on to Royal Dutch Shell Plc, where he was rotated on assignments globally, covering a wide variety of technical and commercial aspects.
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