Reach Energy completes proposed debt settlement exercise  

REACH Energy Bhd has completed its proposed debt settlement amounting to RM206.51 million or approximately 76% from the debt owing to Super Racer Ltd (SRL).

This also signals SRL’s emergence as a major shareholder with 1.03 million shares or 48.5% of the enlarged issued share capital in Reach Energy.  

“The completion of the proposed debt settlement also marked SRL’s entry into a shareholder loan facility agreement to make available a shareholder loan facility of up to US$5 million or RM22.87 million to the company,” Reach Energy said in a statement today.

Approximately RM20.37 million or 89% of the total proceeds from the shareholder loan facility will be used for working capital which encompasses the day-to-day administrative, operational and financing expenditure as well as general corporate purposes.   

Reach Energy CEO Tan Siew Chaing said the completion of this corporate exercise represents a new beginning for the company.

She said that SRL’s shared vision, and with the available funding, Reach Energy will not only be ensured of sustainable operations but we will also be able to pursue opportunities and plans that will accelerate our growth.

“Our first course of action will be to increase our productivity and efficiency, especially our production volume. To achieve this, the drilling of more development wells is high on the agenda in the near term.

“We also intend to install and replace electrical submersible pumps while simultaneously continuing gas injection measures which are crucial to improve reservoir pressure and ultimately increase our production volume,” she added.

The company’s plans and strategies will be supported by a new board of directors helmed by Cheung Hung as its independent non-executive chairman. Simultaneously, the company had also appointed new members to the management team.

Concurrent with the completion of the proposed debt settlement, Reach Energy had also completed the proposed exemption of SRL and Cheung, as the person acting in concert with SRL, from the obligation to undertake a mandatory take-over offer for the remaining Reach Energy shares.

Reach Energy shares fell half a sen or 10% to 4.5 sen with a market capitalisation of RM96 million. ― TMR