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In Targeting Small Explorers, One Firm Aims to Bloom Under a SPAC Structure

Dr.Kenneth Pereira, Hibiscus Petroleum Berhad

08-Jul-11 01:06

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Hibiscus Petroleum Berhad MD Dr.Kenneth Pereira discusses:

- Reasons behind taking nearly two years after the Securities Commission (SC) introduced the SPAC listing guidelines;
- What a SPAC structure entails;
- How to mitigate a weak IPO market and Hibiscus not having a profit track record, assets and very little visibility as to which projects are on the horizon;
- The response so far;
- Details of their investors, placees and entry costs;
- What kinds of investors it is targeting;
- Details of downside protection;
- Details of the prospects;
- How long investors will need to wait before getting some returns;
- Competition from other capital providers and the risk of overpaying;
- The dangers of rushing into a deal;
- The possibility of circumstances changing and nvestors choosing to recall their capital;
- Concerns that Hibiscus seems to be a Bull market play as opposed to the current climate, when risk appetites are swiftly turning conservative;
- Breakeven costs;
- The management team and their strengths;
- Hibiscus being Long on oil and whether the business plan goes pear-shaped if oil heads South;
- Whether the SPAC structure allow Hibiscus to buy the rights to explore for other hydrocarbons or other minerals such as rare earths;
- Hong Leong Investment Bank as its advisers and whether concerned they may not be as experienced as the other, more established IBs;
- Fees-wise, whether it was an intriguing proposition versus other IBs;



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