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Loyz welcomes new controlling shareholder, announces board and management changes
UPSTREAM energy group Loyz Energy on Wednesday said that it is welcoming a new controlling shareholder, and has made strategic changes to its board of directors and management team to enable it to better weather the current challenging environment in the oil and gas sector.
Wave Link LP, an existing shareholder of the company, has entered into a sale and purchase agreement with Jit Sun Investments, the largest shareholder of Loyz Energy, in which Wave Link will acquire an additional 9.85 per cent stake in Loyz Energy from Jit Sun.
The acquired shares will be transferred in two tranches, with the first tranche in May 2016 and the second tranche before August 2016.
Following the completion of the acquisition, Wave Link will become the company's second largest shareholder with a 16.7 per cent shareholding interest.
Jit Sun will remain the largest controlling shareholder of the company, holding a 17.18 per cent shareholding interest.
Wave Link is an investment fund which focuses on investments in certain core sectors, including the oil and gas sector.
Wave Link said that it is attracted by Loyz's proven oil reserves, low cost of production and potential to scale up quickly. "All they need is strong support to enable them to ride through this temporary storm in the oil and gas sector," it said.
On top of the acquisition of shares by Wave Link, Loyz has made several changes to the constitution of its board. Former CFO Jeffrey Pang has been appointed as CEO to replace managing director Adrian Lee, who has been appointed as non-executive director on the board. Mr Pang has also been appointed executive director on the board.
Simon Charles Lockett, chairman of the group, has also stepped down from the board but will continue to contribute as an adviser to the board.
Lead independent director William Teo, who currently chairs the audit committee, has been appointed chairman of the board.
Chan Eng Yew and Chia Yong Whatt will relinquish their respective roles as non-executive director and independent director.
Newly-appointed CEO Mr Pang said: "Our immediate focus is to improve our cash flows and ensure we can operate smoothly even when oil prices are at the current low levels.
"With our substantially reduced operating costs, we are in a good position to benefit when oil prices rise. There is significant untapped potential in our Thailand fields. Low drilling and operating costs imply significant potential to increase production and potentially reserves, thereby boosting the value of our fields and company for the benefit of shareholders.
"Our non-core assets will be divested as we continue to look for strategic options to create more value for our shareholders.
"Taking a conservative view, we have also fully impaired the value of the investments made on non-core assets, even though we believe there will be some value generated when the assets are divested."