Sapura Kencana Petroleum Bhd will list on May 17

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By Yantoultra Ngui

KUALA LUMPUR, May 3 (Reuters) – Malaysia’s Sapura Kencana Petroleum Bhd will list on May 17 with a reference price of 2.30 ringgit per share, a source with direct knowledge of the deal told Reuters.

The price suggests the listing of the merged SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd could fetch a market value of 11.5 billion ringgit ($3.8 billion), ranking it among the top 30 listed Malaysian companies.

The listing will give the company scale to compete against regional heavyweights like Keppel Corp Ltd and Saipem SpA at a time when crude oil prices remain above $110 and the oil and gas services sector expands.

“The prospectus launch is planned on May 16. Bursa Malaysia has not seen the prospectus as yet. It is due to be sent to them today,” the source said on Thursday, asking not to be identified because he is not authorised to speak to the media.

Kencana and SapuraCrest officials were not available for comment.

Shares in Kencana Petroleum and SapuraCrest have been suspended since May 2 to carry out capital repayment exercises and will remain suspended until they are delisted.

The merger of SapuraCrest and Kencana is part of an ambitious government blueprint called the Economic Transformation Programme (ETP) designed to draw in investors and turn Malaysia into a high-income economy by 2020.

The ETP was launched by Prime Minister Najib Razak’s administration in 2010 and was formulated to turn Malaysia into a global oil and gas hub on par with neighbouring Singapore.

By pooling resources, Kencana Sapura is now set to take on more and larger jobs from Malaysia’s state oil firm, Petronas , which has a mandate to aggressively develop Malaysia’s domestic oil assets while prices remain high.

Petronas last year awarded the Berantai marginal oil field to a group comprising Kencana Petroleum, SapuraCrest Petroleum and Petrofac.

OSK rated the planned shares as a “buy” with a target price of 2.88 ringgit. Kenanga Research had an “outperform” call on Sapura Kencana with a target price of 2.63 ringgit.