KUCHING: Reservoir Link Energy Bhd (RLEB) has received the green light from Bursa Securities on the listing and quotation of about 18.69 million new company sales which will be issued as part payment for the proposed acquisition of the remaining 70 per cent equity interest in Propel Maxflo Sdn Bhd.
Wholly-owned subsidiary Reservoir Link Sdn Bhd (RLSB) had earlier entered into a conditional share sale agreement with Propel Oilfield Services Sdn Bhd to acquire the remaining 70 per cent stake in Maxflo for RM17.24 million. The acquisition is to be paid via a combination of about RM13.79 million in cash and the balance of RM3.45 million via issuance of 18,688,347 new RLEB shares at an issue price of RM0.1845 each.
RLSB had paid RM7.39 million for the acquisition of the first 30 per cent stake in Maxflo, which is principally involved in providing products and services for exploration, drilling and well intervention, enhanced oil recovery/improved oil recovery and production technologies specifically for offshore and onshore oil and gas, refinery, chemical and petrochemcial.
According to RLEB, the acquisition of Maxflo will help the group to tap into the Middle East market via Maxflo’s established relationship with overseas customers in Saudi Arabia and Bahrain as well as extensive expertise, such as in enhanced oil recovery and improved oil recovery technologies, thus further strengthening the group’s competitive position in the region.
In addition, RLEB said Maxflo will serve as its strategic launch pad for expansion into key Middle East markets, specifically the United Arab Emirates (UAE), Oman and Qatar. From a tendering standpoint, RLEB said the synergy resulting from full ownership of Maxflo is expected to enhance competitiveness and standing in tenders issued by Saudi Aramco and others.
By acquiring 100 per cent of Maxflo, RLEB said this will allow the group to establish a cost-effective supply chain through strategic resource integration, including the cross border sharing of manpower. Notably, most of Maxflo’s crew members in Saudi Arabia are sourced from countries within the Gulf Cooperation Council, Pakistan and India. These personnel can be rotated into Malaysian operations and vice versa, allowing for better workforce utilisation and minimising operational downtime.
This integrated manpower model supports greater operational flexibility and long-term cost efficiency.
RLEB said Bursa Securities had also approved the listing and quotation of up to 15 per cent the total number of issued shares in the company (excluding treasury shares) pursuant to the proposed new long-term incentive plan (LTIP).
RLEB has proposed the establishment of the LTIP, comprising employees’ share option scheme (ESOS) and a share grant scheme, to eligible persons upon the proposed ESOS 2021 termination.
The ESOS was established on July 28, 2021 and will expire on July 27, 2026.
