Oil and Gas services provider KS Energy (KSE) yesterday announced a rights issue of warrants to raise up to $18.2 million for working capital purposes. It is looking to issue up to 92,747,104 warrants - at the rate of one warrant for four ordinary shares held - at 20 cents each. Each warrant can be used to subscribe for one ordinary share at an exercise price of $1.40. KSE's stock price closed 16 cents, or 12 per cent, higher at $1.44 yesterday.

The move is seen as a bid by KSE to reduce its reliance on banks, sources said. KSE said yesterday that it intends to use the money raised as general working capital. KSE has about 20 onshore and offshore rigs rented out to companies including BP and China's CNOOC. Its warrants issue follows a rights issue of shares last July to raise up to $174 million, partly to expand its fleet of rigs.

KSE said that in a minimum subscription scenario, the maximum possible stake this group of controlling shareholders will hold will be 57.82 per cent of the company's voting rights after the warrant issue. The Securities Industry Council has conditionally approved a whitewash waiver exempting the relevant shareholders from making a general offer for the company.

KSE shareholders will be free to accept in full or in part, decline or otherwise renounce their provisional allotment of warrants. They will also be eligible to apply for additional warrants in excess of their provisional allotment. Indonesian tycoon Mr Wiluan complained last year that 'it is harder getting financing' amid the credit crunch - hence KSE's move to raise money by issuing warrants.