ARMADA (5210) BUMI ARMADA BHD to dispose of four overseas subsidiaries for RM187m

ARMADA (5210)  BUMI ARMADA BHD to dispose of four overseas subsidiaries for RM187m

KUALA LUMPUR (Jan 19): Bumi Armada Bhd is planning to sell four overseas subsidiaries for a total cash consideration of US$44.5 million (RM186.6 million), as part of its plan to exit the offshore marine services business.

The subsidiaries — Bumi Armada Marine Uray Pte Ltd (BAMU), Bumi Armada Marine Pokachi Ltd (BAMP), Bumi Armada Marine Naryan Mar Pte Ltd (BAMN) and Bumi Armada Marine LLC (BAM) — are being sold to AC Management and KN Holdings, both units of PJSC Lukoil, Bumi Armada's bourse filing showed.

The proposed disposals are expected to result in a disposal loss of approximately RM25 million.

Nevertheless, Bumi Armada said the transactions would generate cash inflow to enable the group to repay and reduce its corporate debt, and allow it to redeploy and focus its resources on its core activities. It plans to use US$38 million of the proceeds to trim its debt, and set aside US$6.5 million for working capital.

It inked the sale and purchase agreement for the disposals on Wednesday (Jan 19).

BAMU, BAMP and BAMN are principally involved in ship owning, chartering and managing ships and vessels. They also provide marine support and other services to offshore oil and gas (O&G) companies.

Other than BAM — which is only involved in providing marine support and other services to O&G companies — the remaining three companies own Bumi Uray, Bumi Pokachi and Bumi Naryan vessels, which have been working for LUKOIL-Nizhnevolzhskneft Ltd Liability Co (LUKOIL NVN) in the Caspian Sea, Russia since 2016 under three charter party contracts.

BAMU, BAMP and BAMN were incorporated in Singapore, while BAM was set up in Russia. The four subsidiaries recorded a combined loss after taxation of RM56.6 million for the nine months ended Sept 30, 2021, and have combined net assets (including capital contribution) of RM219.9 million.

The disposals are expected to be completed by the first quarter of this year.

Bumi Armada's share price closed up one sen or 1.92% to 53 sen, bringing the group a market capitalisation of RM3.13 billion.

http://www.theedgemarkets.com/article/bumi-armada-dispose-four-overseas-subsidiaries-rm187m