KUALA LUMPUR (Nov 27): Sapura Resources Bhd said it will settle its RM168 million debt with Jurudata Sdn Bhd (JSB) via the issue of redeemable convertible secured loan stocks (RCSLS) in the group, due to its weak cash flow position which makes it difficult to secure bank borrowings.

The 373.33 million nine-year zero coupon RCSLS will be issued at 45 sen per stock and has a tenure of nine years before JSB may convert them into Sapura Resources shares, the group said in a bourse filing.

Sapura Resources had received the advances from JSB between September 2022 and November 2023 after it was unable to meet its monthly lease payment obligations to Impian Bebas Sdn Bhd (IBSB) for 15 months from February 2022 until April 2023, as part of a master lease agreement for the office tower Permata Sapura.

JSB is owned 92.18% by Sapura Technology Bhd and 7.82% by Teledata Sdn Bhd.

Sapura Resources said the issuance of the RCSLS is expected to assist the group in settling the advances while preserving its cash and bank balances, which can be used for other purposes such as working capital.

Besides the issuance of the RCSLS, Sapura Resources has also proposed a rights issue to raise gross proceeds of up to RM33.5 million, in order to ensure that the group is able to meet its payment obligations under the master lease agreement with IBSB in the coming years as they fall due, in the event that the revenue generated from the leasing and tenancy of Permata Sapura is insufficient to meet such payment obligations.

The initial master lease agreement with IBSB for Permata Sapura is for 15 years commencing on Oct 1, 2021.

Shares of Sapura Resources closed half a sen or 1.06% lower at 46.5 sen for a market capitalisation of RM64.91 million.