Rex unit to issue more preference shares to raise US$17m

REX International's indirect subsidiary Masirah Oil Ltd (MOL) has entered into preference share subscription agreements with Rex Oman, Schroder & Co Banque SA and management member John Pringle to raise some US$17 million.

Rex Oman will subscribe for 29,015 preference shares, Schroder for 6,354 preference shares and Mr Pringle for 210 preference shares. The shares will be issued at US$477.70 apiece.

The subscriptions follow a previously announced preference share issue to fund MOL's drilling activities and operations in Oman. MOL had proposed to issue US$4.5 million worth of preference shares to Trace Atlantic Oil - which MOL's two controlling shareholders have an interest in.

Rex Oman, which holds a 92.65 per cent stake in MOL, will see its majority stake pared to 86.37 per cent after these share subscriptions.

Rex said the increase in share capital and investment round is needed to fund MOL's drilling activities of the appraisal well Yumna in Block 50 Oman. It is also for MOL's continued operations in Oman and for general working capital requirements.

Preference shareholders will receive preferred dividend over ordinary shareholders of MOL and will receive dividends before ordinary shareholders. No other priority is given to them.

The deal is subject to approval from the board of directors and shareholders of MOL, Rex said.

Rex shares closed at S$0.189 on Tuesday, up 0.3 Singapore cent or 1.6 per cent.