Yinson Annual Report 2019

Yinson Holdings Berhad ANNUAL REPORT 2019 210 48. SUBSEQUENT EVENTS (a) On 12 February 2019, Yinson Energy Sdn. Bhd., a direct owned subsidiary of the Company received and accepted a letter of award from JX Nippon to undertake a contract for the Provision of Operation and Maintenance Services for the Nippon FPSO Facilities, by JX Nippon (“O&MContract”). The tenure of the O&MContract is effective from 12 February 2019 and shall remain in full force until termination of the contract for Provision of EPCIC and Leasing for Layang FPSO Facilities (“Charter Contract”). The tenure of the Charter Contract is for a firm period of 8 years with options for 10 extension periods of one year each (“Extension Options”). The estimated aggregate value of the O&M Contract, assuming the Extension Options are fully exercised, is approximately USD578,000,000 (equivalent to approximately RM2,357,000,000). The scope of the O&MContract is to performoperation andmaintenance works for theNippon FPSOFacilities, which is expected to commence operations at the Layang field by 4th quarter of 2019. (b) On 27 February 2019, theCompanymade the third offer of options, a total of 9,000,000options at exercise price of RM4.00 per share in 3 equal tranches exercisable upon the vesting condition and shall expire on 27 February 2023. Offers are made to eligible Executive Directors and employees of the Company. (c) Yinson Nepeta Production Ltd (“YNPL”, an indirect wholly owned subsidiary of the Company incorporated in the Republic of Marshall Islands), Yinson Operations & Production West Africa Limited (“YOPWAL”), an indirect subsidiary of the Company incorporated in the Federal Republic of Nigeria, and First Exploration & Petroleum Development Company Limited (“FIRST E&P”) had on 28 February 2019 executed a contract for the bareboat charter (“Bareboat Charter Contract”) for the provision of a floating production storage and offloading facility to be named Abigail-Joseph (“FPSO”) for use at the Anyala & Madu Fields (“Fields”) under Oil Mining Leases 83 & 85, offshore the Federal Republic of Nigeria. YOPWAL had also on the even date, entered into a contract for the operations and maintenance of the FPSOwith FIRST E&P (“O&MContract”). The primary term of the charter under the Bareboat Charter Contract and O&M Contract is 7 years each from the issuancedateof the certificateof first oil under theBareboatCharterContract. FIRSTE&Pshall beentitled toextend such primary term by one extension period of 24 months and up to 6 further extension periods of 12 months each under the terms and conditions set out in the respective Contract (“Extension Options”). The cumulative duration of the primary term and extension terms of each Contract shall not exceed in aggregate of 15 years. The estimated aggregate value of the Contracts, assuming the Extension Options are fully exercised, is approximately USD901,793,000 (equivalent to approximately RM3,671,000,000) comprising Bareboat Charter Contract of USD617,093,000 and O&M Contract of USD284,700,000 and the FPSO is expected to commence operations at the Fields by the fourth quarter of 2019. (d) Yinson Juniper Ltd (“YJL”), a wholly owned subsidiary of theCompany has completed 2 fresh issuances of Perpetual Securities valued USD90 million and USD30 million respectively on bought deal basis under its USD500 million Multi-Currency Perpetual Securities Program on 29 March 2019 and 5 April 2019. Both the Perpetual Securities are unrated and are listed on the Singapore Exchange Securities Trading Limited bearing no fixedmaturity date but are redeemable at YJL’s option 5 years fromdate of issuance (”First Reset Date”) fall due on 29 March 2024. The issued Perpetual Securities carry periodic distribution rate of 8.10% per annum, distributable semi-annually calculated at the nominal value of securities issued. The distribution rate will subject to an agreed step-up margin of 5% per annum above the prevailing U.S. Treasury Rate after First Reset Date. However under the program, YJL has no obligation to pay any distribution and is allow to elect for distribution deferment at its sole discretionwhere does not constitute a default. ThePerpetual Securitiesmay alsobe redeemed at the option of YJL upon the occurrence of certain events by YJL as per detailed in the terms and conditions of the Perpetual Securities. From the Group’s perspective under MFRS 132 “Financial Instruments: Presentation”, the Perpetual Securities will be classified as equity in financial year ending 31 January 2020 because the payment of any distribution or redemption is at the discretion of the Group. For the financial year ended 31 January 2019 Notes to the financial statements (cont’d)