MISC Bhd’s proposed joint acquisition to take Yinson Holdings Bhd private is expected to require an investment of RM2.85 billion for MISC’s 41.5% stake, which will increase MISC’s net gearing from 0.19 times to 0.27 times for the financial year 2026 (FY26). The transaction involves MISC partnering with Yinson Legacy Sdn Bhd (YLSB) to acquire the remaining 55.2% ownership of Yinson, a floating production storage and offloading (FPSO) vessel owner, at an indicative offer price of RM2.35 per share. Post-acquisition, MISC and YLSB would each hold 41.5% stakes, while the Employees Provident Fund would retain the remaining 17%.

Research from CIMB Securities noted that even without the acquisition, MISC’s planned capital expenditure programme—estimated at US$4 billion to US$5 billion through 2030 for fleet rejuvenation and offshore projects—would gradually push its net gearing to 0.28 times by FY29 and above 0.3 times by FY30. The proposed transaction, while strategically beneficial, introduces higher financial leverage risks, CIMB added.

The acquisition aims to combine Yinson’s offshore execution capabilities with MISC’s strong financial backing and ties to Petroliam Nasional Bhd, potentially creating synergies. However, refinancing Yinson’s high-cost financing facility, currently amounting to RM4 billion with interest rates ranging between 12.95% and 13.5%, could raise MISC’s net gearing to between 0.29 and 0.39 times. CIMB cautioned that meaningful returns in cash distributions might be delayed, forecasting a projected dividend yield of about 2.1% for MISC’s stake, which may not fully balance the increased debt load.

Yinson’s capital structure includes US$1 billion in redeemable convertible preference shares (RCPS) issued via Yinson Production to fund FPSO expansion ahead of a planned initial public offering (IPO) scheduled for June 2030. Conversion of unredeemed RCPS would potentially dilute Yinson’s ownership in Yinson Production from 100% to between 65% and 72%. MISC’s refinancing could reduce annual interest expenses by RM200 million to RM320 million if borrowing costs are lowered to between 5% and 8%.

In parallel, MISC is expected to benefit from elevated tanker charter rates in the second half of FY26 (2H26). CIMB highlighted that tanker rates have surged between 40% and 80% year-to-date, primarily due to geopolitical tensions in the Middle East. This increase is anticipated to improve MISC’s earnings in 2H26, particularly in the fourth quarter, reflecting the lag between securing higher tanker rates and revenue recognition.

BIMB Securities Research also expressed optimism, citing a 74% year-on-year increase in petroleum revenue to RM2.24 billion in the second quarter of FY26 and a doubling of segment profit to RM858 million. Although only about 20% of MISC’s tanker exposure is linked to spot market rates, the sustained strength in charter rates is expected to maintain profit levels through the latter half of the year.

Despite concerns over increased leverage, CIMB reaffirmed a “buy” rating on MISC, raising its target price to RM9.55 per share to account for an upward revision of 2% to 15% in net profit forecasts for FY26 through FY28. BIMB also maintained a “buy” rating with an adjusted target price of RM10.10 per share, highlighting that MISC’s relatively flat year-to-date stock performance does not yet reflect its significantly improved earnings outlook. BIMB projected FY26 earnings of RM3.7 billion, an 18% increase from prior estimates and more than double the RM1.6 billion recorded in FY25, with quarterly earnings expected to reach approximately RM1 billion in both the third and fourth quarters of FY26.