PETALING JAYA: Hengyuan Refining

Co Bhd (HRC) has announced that it is firmly on track to raise up to RM300mil through a proposed renounceable rights issue of up to 300 million new ordinary shares.

This will be done together with up to 150 million free detachable warrants on the basis of one rights share for every one existing share held and one warrant for every two rights shares subscribed for at an issue price and on an entitlement date to be determined and announced later.

Malaysia Hengyuan International Ltd, HRC’s major shareholder with a 51.02% stake of issued shares, has undertaken to subscribe for its full entitlement of rights shares.

In a statement, HRC said this commitment secures the minimum fundraising of RM155mil under the exercise.

“The bulk of proceeds from the rights issue is intended for the purchase of additional crude oil feedstock, the main raw material used in the refining and manufacturing of petroleum products.

“Maintaining adequate feedstock levels is expected to improve production efficiency, lower unit costs per barrel, and strengthen overall competitiveness.”

HRC manages and operates a refinery in Port Dickson with a production capacity of 156,000 barrels per day.

HRC chief financial officer Yeo Bee Hwan said the company has invested more than RM2.2bil in capital expenditure over the past five years to enhance production capabilities and expand into higher-value products such as sustainable aviation fuel and Euro 5 gasoil.

“These initiatives have supported revenue growth and stronger customer demand.

“The proposed rights issue will provide the group with the working capital to secure additional feedstock and support operational efficiency, while also strengthening our equity base and financial flexibility.”