KUALA LUMPUR: Reach Energy Bhd has completed its proposed debt settlement amounting to RM206.51 million, or about 76 per cent of the debt owing to Super Racer Ltd (SRL).

This signals SRL’s emergence as a major shareholder with 1.03 billion shares, or 48.5 per cent of the enlarged issued share capital.

In a statement, oil and gas company Reach Energy said the completion of proposed debt settlement also marked SRL’s entry into a shareholder loan facility agreement to make available a facility of up to US$5.0 million, or RM22.87 million to Reach Energy.

“Approximately RM20.37 million, or 89 per cent 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,” the statement said.

Chief executive officer Tan Siew Chaing said the corporate exercise represents a new beginning for Reach Energy. With the available funding, sustainable operations will be ensured. It will also be able to pursue opportunities and plans that will accelerate growth.

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

She said that the company also intends to install and replace electrical submersible pumps while simultaneously continue gas injection measures which are crucial to improve reservoir pressure, and ultimately increase production volume.

Tan further said that Reach Energy would improve its profitability by addressing a price differential issue that it has been encountering.

”On this note, we intend to explore new routes to enable Emir-Oil to export its oil at a price close to the international oil price. We have identified several alternative export routes and we are in the midst of negotiating the terms with several potential buyers,” she added.