Renaissance Services is preparing for a cash call to investors in an effort to boost the company's expansion drive in the Gulf and the Caspian Sea after the cancelled listing of its UAE subsidiary this year.
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The Omani oilfield services company's board approved a capital increase of 50 million Omani rials (Dh475.8m) through a "quasi-equity instrument", Renaissance said in a statement to the Muscat Securities Market. The company will seek to raise capital from existing shareholders and new investors through a private placement, said Samir Fancy, the chairman.
"This capital raising provides Renaissance with the financial flexibility to continue our expansion plans and grow our core business, which continues to deliver a strong performance," he said. "We have made significant progress in addressing the challenges of 2011 and are pleased by the support shown in us by our investors."
BankMuscat acted as financial adviser and arranger of the capital raising.
Renaissance's plans to sell its stake in Topaz Energy and Marine were postponed by the Arab Spring, which forced a cancellation of the company's US$500m (Dh1.83 billion) listing on the London Stock Exchange in March.
Renaissance's shares were flat at 0.546 rials in trading on the Muscat bourse yesterday after the announcement. The shares have fallen 50.7 per cent this year, with the company experiencing three consecutive quarters of lower profit and a fraud scandal.
Renaissance said in September it had written off $2.9m of funds that had been "misappropriated" over a six-and-a-half-year period at Topaz Group, its UAE subsidiary.
Topaz Energy and Marine raised $380m from banks last month as part of a refinancing deal, which also included investments in new vessels.