$1 billion liquidity injection comes Yinson Production’s way to bankroll FPSO player’s growth aspirations

A new investment shot to be poured into Yinson Production, the floating production storage and offloading (FPSO) business arm of Kuala Lumpur-based energy infrastructure and technology company Yinson, has been secured with a consortium of international investment firms to pave the way for the Malaysian giant’s growth journey, with a smaller slice of the $1 billion equity financing pie earmarked for the controlling shareholder.

While disclosing a definitive agreement to raise $1 billion in redeemable convertible preferred shares (RCPS) and 10% warrants at a post-money valuation of $3.7 billion, the Malaysian firm highlighted that the pre-IPO growth capital was secured through its newly established, UK-based holding company known as Yinson Production Offshore Holdings Limited.

The FPSO market player highlights that the equity raise of $1 billion comes with the option to up the amount to $1.5 billion by issuing additional RCPS of up to $500 million within 24 months of closing, subject to agreement. The equity raise is slated to be completed in the first quarter of 2025, subject to customary closing conditions.

This investment, obtained with a consortium comprising Platinum Lily B 2024 RSC (Platinum), a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), and funds managed by British Columbia Investment Management Corporation (BCI), and RRJ Group (RRJ), together with ADIA and BCI, is set to primarily drive Yinson Production’s further growth, while $200 million will be distributed to the controlling shareholder, a wholly owned subsidiary of Yinson.

Flemming Grønnegaard, Chief Executive Officer of Yinson Production, commented: “We are delighted to welcome ADIA, BCI and RRJ as new investors in Yinson Production. This is one of the largest structured equity transactions in Southeast Asia and the first platform-level equity raise by Yinson Production.

“It builds upon Yinson Production’s proven track record of delivering value accretive growth through our integrated platform. The growth capital will further strengthen our leading market position and enables us to seize opportunities in a robust FPSO market environment.”

Yinson Production, which has a fleet of ten vessels that lifted its order book to more than $22 billion until 2048, has confirmed that UBS AG, Singapore Branch, acted as financial advisor and A&O Shearman as its legal advisor in connection with this transaction.

The Malaysian FPSO player was a busy bee during 2024, prolonging existing deals and securing new assignments such as the one the firm landed in collaboration with PTSC for the provision, charter, operation, and maintenance of a floating storage and offloading (FSO) unit for an oilfield development project in Vietnam, where the duo also won a contract extension for the FPSO PTSC Lam Son.

Yinson Production, which is bringing its zero-emissions FPSO concept to life for the decarbonization of the FPSO industry, ended 2024 on a high note by achieving first oil from its third FPSO unit in Brazilian waters. This unit is envisioned to feature a carbon management process plant to curb the emissions footprint.