Kuala Lumpur: Yinson Holdings Bhd’s indirect wholly owned subsidiary, Yinson Production Offshore Holdings Ltd (YPOHL), has secured a US$1 billion (RM4.48 billion) investment from a group of international investment firms to drive further growth.
According to BERNAMA News Agency, the investment includes an option to increase up to US$1.5 billion within 24 months. The consortium of investors comprises Platinum Lily B 2024 RSC Ltd, a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), funds managed by British Columbia Investment Management Corporation (BCI), and RRJ Group.
The company detailed in a Bursa Malaysia filing that the investment will enable the group to generate necessary funds for general corporate purposes of the YPOHL Group (RM3.51 billion), the expansion of its renewable energy business (RM268.53 million), and the expansion of its green technology business (RM89.51 million). Additionally, the funds will be used to repay bank borrowings (RM89.51 million), for the group’s working capital (RM313.29 million), to distribute to shareholders through share buy-back and dividends (RM134.27 million), and for expenses related to the proposed YPOHL redeemable convertible preference shares (RCPS) and warrants issue (RM69.37 million).
The proposed YPOHL RCPS and warrants issue is designed to allow the group to raise funds for the acquisition and conversion costs of vessels for new floating production storage and offloading (FPSO) projects. This initiative will grant YPOHL increased financial flexibility and better cash flow control while enabling Yinson to maintain its equity interest in YPOHL without immediate dilution, which could occur from issuing new YPOHL shares.
Yinson Group chief executive officer Lim Chern Yuan expressed satisfaction in welcoming ADIA, BCI, and RRJ as new investors in Yinson Production. He stated that this transaction arrives at a significant moment for Yinson, enabling Yinson Production to seize opportunities in the robust FPSO market and to return capital to shareholders while funding the group’s energy transition businesses, Yinson Renewables and Yinson GreenTech.
The transaction is set to close in the first quarter of 2025, pending customary closing conditions, including regulatory approvals and Yinson shareholders’ approval. UBS AG, Singapore Branch acted as the financial advisor and A and O Shearman acted as the legal advisor to Yinson Production for the transaction.