The Star Section: Business Ad Value: RM 23,552 21-Jul-2021 Size : 468cm2 PR Value: RM 70,657

Yinson adopts capital recycling

CORPORATE

PETALING JAYA: Capital recycling will be Yinson adopts part of Yinson Holdings Bhd's financing strat­ egy to fund its ambitious growth plans. _ — H — — 修♦ This means the company is prepared to W reduce its 74% stake in the floating, produc- . ■ ■ . . . wv ■ 一 tion, storage and offloading (FPSO) unit, John H H ■ ■ ■ ■ ■ Agyekum Kufuor (JAK), ofifehore Ghana, and ■ ・ 75% stake in FPSO Anna Nery; offshore Brazil. In addition, Yinson is also looking at poten­ tially paring down its stakes in its greenfield Company has strategy to help finance growth plans renewable energy (RE) projects by selling them to investment funds at a profit, and ance) considerations. then, recycling the capital into other projects. "Banks are still very much focused on the This strategy is expected to help Yinson "Yinson is in touch with various cashflows from the project in question, limit its equity issue to RMIbil. which ultimately boils down to the charter The oil and gas service provider, which interested parties and is confident rates to be paid by the FPSO charterer and to specialises in the provision of FPSO services, the creditworthiness of the FPSO charterer is actively seeking to expand its footprint in it can sell down its stakes quickly.” and its parent company" CGS-CIMB Research the RE and green technologies space. said. The company has a handful of FPSO bids CGS-CIMB Research Yinson noted that enhancing the ESG cre­ and prospects, while at the same time, it is dentials of its future FPSOs would likely help pursuing many RE projects. it secure a higher loan-to-value ratio for pro­ Yinson has previously indicated its inten­ ject financing, the brokerage added. tion to undertake a RMIbil rights issue of new possibly to below 50%, to secure the cash the award likely to be in the third quarter of Meanwhile, it is noted that Yinson planned ordinary shares should it succeed in winning needed to fund the equity portion of the capi­ this year; and Aker Energy,s FPSO Pecan in to increase its RE power generation capacity the FPSO contract from 's Parque tal expenditure (capex) for new FPSO pro­ Ghana, another potential award for next to between 3GW and 5GW over 2022-2025 das Baleias (PDB). jects," it said. year. and to establish its presence in at least three The company does not intend to undertake '•Yinson is in touch with various interested In addition, the company's ongoing prelim­ markets. further rights issues even if it secures addi­ parties and is confident it can sell down its inary Front-End Engineering Design work for "Yinson selects the countries that it wants tional contracts after FPSO PBD because it stakes quickly once it has decided to pro­ two TotalEnergies projects could result in to invest or build its RE assets in by first eval­ does not believe in frequently going back to ceed," it added. contract awards in 2022 as well. uating the degree of policy support from the shareholders for more funds each and every CGS-CIMB Research reiterated "add" on Yinson noted that plenty of FPSO projects governments. Its RE pipeline encompasses time it wins new projects, according to CGS- Yinson, with a target price of RM6.18. had been up for bidding presently. potential projects to North America, South CIMB Research, citing Yinson's management The counter closed two sen lower at RM5.03 The group had expressed interest to partic­ America, Europe, Asia and Australasia；5 CGS- team. on Monday. Year-to-date, the counter had lost ipate in the FPSO projects for Jadestone CIMB Research said. "Therefore, it will have to explore alter­ 12.5%. Energy's Nam Du Minh development and For now, Yinson is focusing on India, Italy; native funding sources, primarily by recy­ The announcement for Yinson's FPSO PDB PetroVietnam^ Block B gas development, off­ South America (Chile, Columbia and Peru), cling its capital out of 74%-owned FPSO JAK bid is expected by October this, with the shore ; TotalEnergies's Chissonga and New Zealand. and out of 75%-owned FPSO Anna Nery»" group likely to again emerge as the sole bid­ development, offshore Angola; and Enauta's On capital recycling in the RE space, CGS- the brokerage noted, following a recent der from Petrobras' re-tendering exercise. Atlanta phase two development, offshore CIMB explained, rather than holding an asset meeting with Yinson group CEO Lim Chern With capex at around USSIbil (RM4.2bil) and Brazil. to maturity like a bond, farming down stakes Yuan, group chief strategy officer Daniel assuming 30% equity funding, Yinson will Yinson said it has not had any difficul­ in projects may be a faster way of recouping Bong, and director of group CEO office Chai need to set aside US$300mil (RM1.3bil) for the ties securing project debt funding for its capital, which can then be recycled into other Jia Jun. equity portion of the capex. FPSO projects despite the growing atten­ RE projects to diversify Yinson's exposures "For the FPSO JAK and FPSO Anna Nery; Yinson had also submitted bids for tion of financial institutions and banks on across more projects and geographical Yinson is prepared to trim its stakes further, 's FPSO Limbayong in , with ESG (environmental, social and govern­ regions.