Author Topic: Bumi Armada  (Read 5153 times)

Offline pearl_white

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Re: Bumi Armada
« Reply #50 on: May 31, 2018, 04:13:39 PM »
As predicted, revenues from Armada IS NOT ENOUGH to cover its debt. (all numbers are in RM'000).



PROOF - REVENUES NOT ENOUGH TO SETTLE DEBT

Page 8 of Q1 2018 Report – EBITDA
NET CASH FLOWS GENERATED FROM OPERATING ACTIVITIES - RM214,478

Page 2 Q1 2018 Revenue for the quarter
Revenue – RM600,342

So, EBITDA margin is 35.7% (214,478 / 600,342).

Page 5 of Q1 2018 Report - Total debts match to FIRM orderbook
Current Liabilities Borrowings – others – RM3,510,364
Current Liabilities Borrowings – Armada Kraken Pte Ltd – RM1,955,083
Non Current Assets - Borrowings – RM5,402,936
Total debts (add all above) – RM10,868,383

Page 1 of media release for Q1 2018 - Total FIRM Orderbook
FIRM Orderbook – RM26.2 billion

So, EBITDA from Firm Orderbook RM26.2 billion x 35.7% = RM9,353,400,000.

So, RM9.4 billion in EBITDA from FIRM Orderbook is insufficient to pay RM10.9 billion of debts.



PROOF - 13 YEARS TO FULLY SETTLE DEBT IF REVENUE STABLE FOREVER

EBITDA per quarter - RM214,478 ('000)
Total debts RM10,868,383 ('000)

So, it would take about 50.67 quarters to settle or NEARLY 13 years. (10,868,383 / 214,478 = 50.67 quarters or NEARLY 13 YEARS !!



PROOF - NOT ENOUGH TO SETTLE INTEREST AND TAXES

AND this is not including payments for Taxes and INTERESTS / Finance Costs !!

Let’s not talk about reduction in rates, delays in production targets, bad debts etc which puts Armada in a worst off position.

Even if EBITDA margins increase to 50%, Armada may be able to pay its debts, but still insufficient to cover Taxes and INTERESTS / Finance Costs !! Even throwing in the RM1.5 billion cash would be insufficient to cover.



PROOF – ARMADA CANNOT GET ANY MORE FINANCING

Page 20 Q1 2018 Report - Borrowings
Note 21 point (2) – not met the financial covenant of net debt over earnings before interest, taxation, depreciation and amortisation (“EBITDA”)

Offline pearl_white

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Re: Bumi Armada
« Reply #51 on: June 05, 2018, 03:11:02 PM »
Based on the financial review of Armada, it was determined that: -

PROOF – ARMADA REVENUES ARE NOT ENOUGH TO SETTLE DEBT
PROOF - 13 YEARS TO FULLY SETTLE DEBT IF REVENUE STABLE FOREVER
PROOF - NOT ENOUGH TO SETTLE INTEREST AND TAXES
PROOF – ARMADA CANNOT GET ANY MORE FINANCING

If this was presented in a pie chart, it would look like this: -

XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX

Pie Chart of Total CASH FIRM ORDERBOOK

XXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX

Pie Chart of TOTAL CASH OPEX AND CASH DEBT THROUGHOUT FIRM ORDERBOOK

Before proceeding to review the ability of Armada to obtain new contract awards in the future, it is worth noting that whilst the OPTION period of the contract is very sizeable, it is fraught with the following risks, (some of which is happening now).  Those risks are: -

Option periods are subject to a year on year renewal.
Option periods are subject to discounts / reductions.
Option periods are subject to termination.
Option periods if granted, would be used to settle long outstanding debts, as with the case of TGT.

It is because of these risks, the expected upsides in option periods are quite restricted.

Offline pearl_white

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Re: Bumi Armada
« Reply #52 on: June 05, 2018, 03:11:28 PM »
Armada’s ability to obtain new contract awards in the future is considered difficult.  The reasons are:


PROOF 1 - Lack of FDIs for the foreseeable future, at least until 2030.

FDIs do not increase in accordance with higher oil prices now for a few reasons.  One, the artificial high oil price due to geopolitical concerns creates uncertainty for producers/majors/independents.  Two, intervention by oil producers create price stability for consumers, but on the other hand create artificial pricing which again create uncertainty to oil producers/majors/independents.  Three, existing shale producers re-enter the market without any barriers to artificially high oil price, thereby exasperating oil supply direction.  Forth, FDIs needs years of planning and review and do not just re-engage within a year to due artificial oil price.


PROOF 2 - Armada has lost the momentum as a major player since 2014.

Armada lost to Yinson in ENI Ghana's Cape Tree Points FPSO project in 2015.
https://www.rigzone.com/news/oil_gas/a/136956/yinson_clinches_254b_fpso_contract_from_eni_for_ghanas_octp_block/?all=hg2

Armada lost to Yinson in Talisman's Vietnam Ca Rong Do FPSO project in 2017.
https://www.thestar.com.my/business/business-news/2017/04/26/yinson-nets-fpso-charter-contract-valued-up-to-rm4pt35bil/

In both cases, Armada was called front-runner, preferred contractor, in the finals, etc.


PROOF 3 - Armada has been without a business development / sales team since 2014.

Clientele engagement and bidding work begins years, typically 6 years, before actual contract award.  Since 2014, Armada has not been engaging actively with its clients.  It has only been recently that Armada has been looking to have a business development / sales team again.

https://www.linkedin.com/jobs/view/569573217/


PROOF 4 – Armada embroiled in various allegations from various countries including EU. 
There are many allegations, from Africa, from EU to South America that are publicised in blogs or news articles.  A few of the prominent ones are:

https://www.timesofmalta.com/articles/view/20180305/opinion/Silencing-adversaries-Denis-Tanti.672389

http://www.independent.com.mt/articles/2018-04-16/local-news/David-Casa-says-he-will-not-reveal-source-in-order-to-protect-the-person-s-life-6736188182

https://www.nytimes.com/2018/04/17/world/europe/journalist-murder-malta-eu.html
   
Such allegations even not proven yet in a court of law, is very detrimental to bidding of work.


PROOF 5 – Armada’s strategic direction is uncertain due to controversies with its major shareholder

http://www.business-standard.com/article/companies/malaysian-mogul-t-ananda-krishnan-to-lose-7-bn-due-to-failed-aircel-foray-118030100254_1.html

http://www.sundaytimes.lk/article/1036448/slt-ceo-dileepa-wijesundera-quits

https://www.bloomberg.com/news/articles/2016-09-24/india-issues-arrest-warrant-for-malaysian-billionaire-krishnan

Is Armada being led correctly to the correct path?


PROOF 6 – Armada’s behavior as a contractor has been one of litigation.

http://www.theedgemarkets.com/article/bumi-armada-gets-notice-erin-petroleum-seeking-shutdown-its-fpso-operations

https://www.offshoreenergytoday.com/woodside-ends-fpso-contract-bumi-armada-takes-legal-action/

Relations with its existing clientele are not very good and Armada has been taking the litigation route in many of its dealings.


These are the 6 factors that are do not go well with Armada’s attempts to bid for work in the future.

Offline Teosh

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Re: Bumi Armada
« Reply #53 on: June 08, 2018, 05:04:57 PM »
EPF keep buying Armada :o   :wonder: :wonder: :wonder:
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Offline pearl_white

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Re: Bumi Armada
« Reply #54 on: June 17, 2018, 06:44:07 PM »
 Based on the financial review of Armada, it was determined that: -

PROOF – ARMADA REVENUES ARE NOT ENOUGH TO SETTLE DEBT
PROOF - 13 YEARS TO FULLY SETTLE DEBT IF REVENUE STABLE FOREVER
PROOF - NOT ENOUGH TO SETTLE INTEREST AND TAXES
PROOF – ARMADA CANNOT GET ANY MORE FINANCING


Additionally, Armada’s ability to obtain new contract awards in the future is considered difficult. The reasons are:


PROOF - Lack of FDIs for the foreseeable future, at least until 2030.
PROOF - Armada has lost the momentum as a major player since 2014.
PROOF - Armada has been without a business development / sales team since 2014.
PROOF – Armada embroiled in various allegations from various countries including EU.
PROOF – Armada’s strategic direction is uncertain due to controversies with its major shareholder
PROOF – Armada’s behavior as a contractor has been one of litigation.


Now that we have established significant headwinds for Armada, we are now going to analyse what options there are for Armada from the point of view of the Main Shareholder.


There have been various corporate exercises for Armada since listing in July 2011. If you were the initial shareholder since listing and excercised your rights under the various corporate exercises, Armada’s share price at your initial point of investment is RM2.20 per share thereabouts now.


As of the latest closing price, it is RM0.72, representing a loss of RM1.48 per share or nearly 67% or 2/3.

!!!!! THAT IS A LOT OF MONEY LOST BY THE MAIN SHAREHOLDER !!!!!

If there weren’t any EPF support, Armada’s share price would have even been lower.

HOW IS THE MAIN SHAREHOLDER GOING TO RE-COUP ITS LOSSES?

Offline jjwong

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Re: Bumi Armada
« Reply #55 on: June 17, 2018, 08:50:15 PM »
EPF keep buying Armada :o   :wonder: :wonder: :wonder:

Armada boss will privatise at 30sen, and thank all epf and retailers for their support pass 5 yrs
the * has been doing type of relist at 5 rgt, privatidse at 50sen for few times last 10 years
"The only conquests which are permanent and leave no regrets are our conquests over ourselves"    Quote from Napolean Bonaparte

Politicians like to rally the masses to stage conquest  against "the enemy",  the real intent is  actually...$ $

Offline Teosh

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Re: Bumi Armada
« Reply #56 on: June 26, 2018, 06:31:28 PM »
why EPF keep supporting Armada?  :wonder: if no support from EPF could it sustain?
Is Armada heading 50cent in future? :wonder:
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Offline Teosh

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Re: Bumi Armada
« Reply #57 on: September 08, 2018, 09:26:58 PM »
why EPF keep supporting Armada?  :wonder: if no support from EPF could it sustain?
Is Armada heading 50cent in future? :wonder:
sudah below 60cents bottom
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Offline pearl_white

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Re: Bumi Armada
« Reply #58 on: September 13, 2018, 12:15:56 PM »
Amateurs, amateurs at work here. Some try to put "finance" speak, when they can't even comprehend the ramifications. These amateur should go read the Financial Standards on asset valuations.

The impairment of Kraken is a negotiated impairment, which means that the full impairment has not been made.

Long story short, Armada Kraken is a "lemon" FPSO which they can never ever make good. It will forever breakdown, even it is pushed to full capacity. Understand?

There goes the IRR and there goes Armada's reputation, whatever is left of it.

Armada is playing into the hands of Enquest, which is to buy over the "lemon" FPSO cheap and remove Armada as operator. The writing is on the wall.

All these have been going on for years during construction. You now have a partial answer as to why acceptance is taking so long and why it was only DISCLOSED when it was only brought up by someone asking this question during AGM.

Offline Teosh

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Re: Bumi Armada
« Reply #59 on: October 02, 2018, 04:31:48 PM »
Bumi Armada aims to improve balance sheet
 

OIL & GAS
Saturday, 15 Sep 2018

WHILE a number of analysts agree that the worst may already have been priced into Bumi Armada Bhd, there are some concerns the company may need to resort to raising funds given its high gearing position and the need to brighten its outlook in order to secure jobs moving forward.

The company is well aware of this issue and tells StarBizWeek that it is looking at a number of approaches to improve its balance sheet.

“These include a Euro Medium Term Note (EMTN) facility, a possible private trust structure, asset disposals, debt refinancing or alternative fund sources,” a Bumi Armada official says.

“The structures under review are long-term in nature, which is aligned to the business we are operating in.

image: https://content.thestar.com.my/smg/settag/name=lotame/tags=Demo_Age_25to34_enr,Demo_Age_35to44_enr,Demo_Age_45to54_enr,Int_Food,Int_Automotive,all,Int_Lifestyle,Int_Property,Demo_Age_55to64_enr,Demo_Age_65plus_enr,Demo_Gender_Female_enr,Demo_Age_18to24_enr

 
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Bumi Armada had reported a shock loss in its recent second quarter ended June 30 that had brought its shares to a 21-month low of 51 sen but it had stabilised at this level following the decline.

High impairments in the oil & gas company had caused it to report a net loss amounting to RM585.48mil.

It had recognised an impairment charge of RM477.2mil and RM1.7mil for the Armada Kraken floating production, storage and offloading (FPSO) unit and the group’s joint-venture company, PT Armada Gema Nusantara respectively.

This marks its first quarter of losses after five successive quarters of churning in improved profits since its first quarter of the financial year 2017 (FY17).

Delving deeper into its balance sheets, analysts have highlighted a need for the company to address its high net gearing level of 1.8 times.

Commenting on the recent news that Bumi Armada had secured the final acceptance for the Armada Kraken floating production storage and offloading (FPSO) vessel, Maybank Investment Bank said this development is a positive step for the company as it removes termination risk and de-risks earnings.

Bumi Armada had on last Friday announced to Bursa Malaysia that it had been issued with the final acceptance certificate in accordance with the Bareboat Charter without any major safety incident.

“This enables Bumi Armada to recognise an additional 10-20% of its bare-boat charter. In addition, that would also enable Bumi Armda to access the US$1.5bil medium term notes, which is associated with the final acceptance.

With the removal of this risk, Bumi Armada’s next move would be to work on its balance sheet,” Maybank Investment Bank says in its report.

“Bumi Armada needs to refinance its RM6.2bil short-term debt, of which 31% is related to the Kraken project.

“We do not rule out prospective corporate exercises (e.g. placement, rights issue, selling of strategic assets, private trusts) to de-gear. Its net gearing level stood at 1.8 times as at June 30,” the report adds.

Maybank Investment Bank also notes that the high gearing level can affect cashflows which could impede its debt servicing efforts.

It also notes that Bumi Armada will find it challenging to capitalise on the buoyant FPSO prospects until it addresses its highly geared balance sheet.

The research house kept its hold rating on Bumi Armada with a target price of 55 sen.

According to its second quarter financial report’s balance sheets, Bumi Armada had cash and cash equivalents amounting to RM1.42bil as at June 30 and short and long term borrowings of RM11.048bil.

According to information obtained from analysts, its management had recently guided that the recent final acceptance would mean Bumi Armada being able to restructure some RM1.947bil of its short term borrowings (payable in 12 months) to long term borrowings on its balance sheets.

This is because the company was able to obtain a final acceptance from EnQuest, the client for the Armada Kraken project.

“While in totality, its debt profile has not changed.

“But when you look deeper this final acceptance will ease the short term cash requirements on Bumi Armada to pay back the short term loan,” AffinHwang Capital’s research analyst Tan Jianyuan tells StarBizWeek.

Meanwhile, CGSCIMB says in its report that the final acceptance obtained by Bumi Armada from EnQuest is truly a long awaited development for the oil and gas company.

Bumi Armada had agreed on Aug 29 to pay EnQuest US$15mil as the full and final settlement for all claims prior to Jul 31, 2018 and is expected to incur a further US$10mil in costs to bring the FPSO to final acceptance.

In the second quarter of this year, Bumi Armada had expensed an estimated US$12mil for repairs of Kraken equipment, and impaired the Kraken asset by US$119mil as the calculated present value of the penalties that EnQuest had imposed on Bumi Armada for the unresolved technical impediments for the remaining seven-year firm and 17-year option periods.

CGSCIMB estimates that the internal rate of return of the Kraken charter over the eight-year firm period has now dropped to around 3%, from the target of a circa. 10% at its inception, after factoring in the liquidated damages and upfront fee refund that was negotiated in 2016.

“With the line now clearly drawn under the Kraken provisions, and with the share price having de-rated rapidly post second quarter results, we believe there is greater upside risk than downside risk.

For instance, if the FPSO’s technical impediments are resolved in the future, the penalties no longer need to be paid to EnQuest, and Bumi Armada’s valuation can be revised upwards by the portion of the US$119mil impairment that can be written back,” CGSCIMB says with an unchanged “add” rating and a target price of 73 sen.


Read more at https://www.thestar.com.my/business/business-news/2018/09/15/bumi-armada-aims-to-improve-balance-sheet/#KCf71JJcy1v4Y367.99


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Offline Teosh

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Re: Bumi Armada
« Reply #60 on: October 03, 2018, 11:41:53 AM »
Bumi Armada active, up 3.54% on rising crude oil prices

Surin Murugiah/theedgemarkets.com
October 02, 2018 11:27 am +08

KUALA LUMPUR (Oct 2): Shares in Bumi Armada Bhd rose 3.54% in active trade this morning, riding on rising crude oil prices.

At 10.58am, Bumi Armada rose 2 sen to 58.5 sen with 10.83 million shares traded.

Oil markets were firm on Tuesday, with Brent crude prices holding near four-year highs reached the previous day as markets adjust to the prospect of tighter supply once the US sanctions against Iran kick in next month, according to Reuters.

International benchmark Brent crude oil futures were at US$85.02 per barrel at 0255 GMT, up 4 cents from their last close, and not far off the US$85.45 peak reached in the previous session, the highest since November 2014, it said.

CIMB Retail Research said it expects Bumi Armada to gain traction from the rising oil prices.

The research house has a "buy" rating on the stock.
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Offline Teosh

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Re: Bumi Armada
« Reply #61 on: October 16, 2018, 10:05:36 PM »
Bumi Armada denies acquiring VLCC
Surin Murugiah/theedgemarkets.com
October 16, 2018 13:28 pm +08
 
KUALA LUMPUR (Oct 16): Bumi Armada Bhd has denied it has acquired the very large crude carrier (VLCC) Front Ariake.

In a filing with Bursa Malaysia today, Bumi Armada denied the report by Intermodal Shipbrokers Co.

Intermodal had recently reported Bumi Armada had acquired the 298,530 dwt ship for US$20.7 million.

The Bahamas-flagged vessel is owned by Bermuda-based Ship Finance International Limited (SFL).

At midday break today, Bumi Armada fell 6.19% or 3 sen to 45.5 sen, with 6.07 million shares traded.
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Offline Teosh

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Re: Bumi Armada
« Reply #62 on: October 22, 2018, 12:44:25 PM »
Bumi Armada not looking into equity fund raising

CORPORATE NEWS
Monday, 22 Oct 2018
10:33 AM MYT

 KUALA LUMPUR:  The management of Bumi Armada is not considering equity fund raising but instead it is mulling asset monetisation, such as selling floating production storage and offloading (FPSO) stakes to partners, setting up private trusts (infrastructure funds) or tapping into an available debt facility of US$1.5bil.

UOB Kay Hian Malaysia Research said on Monday these plans have been worked out for more than a year and are in advanced stages

“We believe that due to the awareness that some of these plans may see near-term conclusion, Bumi Armada may have reached positive negotiations with its bankers to renegotiate or extend the timeline for the corporate debt repayment (October 2018 tranche),” it said.

To recap, the research house said the oil and gas services provider was not looking into a  cash call as the group would avoid new projects in the near term.

Other monetisation plans are at advanced stages, which leads to UOB Kay Hian Research’s belief that debt repayments can be positively renegotiated.

“We cut our forecasts and valuations to assume potential impairment and earnings risk in OMS. Maintain Buy with a lower target price of 66 sen although we advise wait-and-see for upside in 2019 horizon,” it said.

The research said various concerns were behind the share price decline.

Despite achieving final acceptance for FPSO Kraken, Bumi Armada’s share price fell below its previous low in 2016 (when the company reported core quarterly losses) on sell-down from foreign and domestic funds.

The research house said this was due to several concerns or the elephants in the room: a) default risks on a weak balance sheet, b) equity fund raising if it wins a contract now, and c) further earnings disappointment.

“While there are no major concerns on debts at the project (FPSO) level, investors are monitoring the progress of refinancing the US$500bil corporate debt payable in three tranches from October 2018.

“There are several projects where Bumi Armada’s opted to submit technical proposals only, and avoiding commercial submissions at this juncture until it strengthens its balance sheet.

“We believe the FPSO projects that are deemed as high priority for BAB are the Zabazaba (Eni, Nigeria) and the KG-DWN-98/2 (ONGC, India). These are large projects with capex at more than US$1bil,” it said.

Zabazaba will take some time to reach final investment decision as the legal process in relation to corruption charges on Eni has been resolved.

The group, which was deemed as a frontrunner for the job, expects the Zabazaba award timeline in late-2019.

For any Indian projects, the group does not expect any near-term contract flows as the country may face policy changes after the 2019 elections. Overall, these should alleviate investor concerns as winning a project immediately at this time is perceived as negative for the group.

Read more at https://www.thestar.com.my/business/business-news/2018/10/22/bumi-armada-not-looking-into-equity-fund-raising/#05ODfjB0IoraorUw.99
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Offline Teosh

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Re: Bumi Armada
« Reply #63 on: October 24, 2018, 10:18:06 AM »
Bumi Armada to get part of RM38m oil sale
CORPORATE NEWS
Monday, 22 Oct 2018 1:08 PM MYT

Bumi Armada to get part of RM38m oil sale
CORPORATE NEWS
Monday, 22 Oct 2018 1:08 PM MYT

KUALA LUMPUR: Bumi Armada Bhd  will receive part of the proceeds from the sale of crude oil amounting to US$8.5mil (RM35mil) from the sale of the crude oil stored on Armada Perdana FPSO.

It said on Monday the US Bankruptcy Court in Texas allowed the appointment of a receiver/manager in Nigeria over Erin Petroleum Nigeria Ltd (EPNL) to oversee the sale and disposal of the crude oil stored on the Armada Perdana FPSO.

The oil and gas services provider said the order was obtained on Oct 18 following the bankruptcy filing by EPNL (together with its parent company Erin Energy Corporation and certain other subsidiaries).

Bumi Armada said the order provided that a portion of the proceeds of the sale from the crude oil amounting to US$8.5mil (RM35mil) would be used to partially settle the outstanding amounts due from EPNL to Bumi Armada (Singapore) Pte Ltd (BASPL) and Armada Oyo Ltd (AOL).

The amount was for the provision of services by BASPL and AOL to EPNL under the operational and maintenance services contract and bareboat charterparty contract for Armada Perdana FPSO.
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Offline Teosh

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Re: Bumi Armada
« Reply #64 on: November 09, 2018, 02:09:45 PM »
Bumi Armada says not in default risk — report
Chong Jin Hun/theedgemarkets.com
November 07, 2018 14:31 pm +08


KUALA LUMPUR (Nov 7): Bumi Armada Bhd maintained its guidance that it is not in default risk because the oil and gas services provider is working with lenders and there are no deadlines in the current renegotiation of extending the refinancing of short-term loans.

UOB Kay Hian Securities (M) Sdn Bhd analyst Kong Ho Meng, quoting Bumi Armada's management, wrote in a note today Bumi Armada is not considering an equity fund raising, and it will not secure any projects in the near term until it resolves its balance sheet.

"Bumi Armada, when contacted by the media, said it has postponed the US$500m debt restructuring deadline to 1H19. Bumi Armada has no intention to go for a rights issue as it is pursuing other options — refinance, EMTN (Euro medium-term note) or trust (infrastructure funds) — to raise funds. A rights issue at the current price would not raise much money and would further erode share price. The new update is that negotiation for the refinancing is extended until 1H19," Kong said.

He said UOB Kay Hian maintained its buy call for Bumi Armada shares with a target price of 66 sen. At Bursa Malaysia today, Bumi Armada shares rose 0.5 sen or 1.28% at 12:30pm to settle at 39.5 sen.

Kong said: "We took into account that the group is still profit-generating and unlikely to report losses. Current risk-reward appears palatable but stock sentiment will continue to be weak on balance-sheet concerns and earnings confidence issue. Hence, although there is attractive upside from current price levels, we advise a wait-and-see towards the 2019 horizon once the company resolves its balance-sheet issues and monetisation plans, and ensures earnings sustainability in at least the next few quarters."

The Edge Financial Daily reported today Bumi Armada missed its proposed October deadline to restructure some US$500 million (RM2.09 billion) worth of unsecured short-term loans due in three tranches by May 2019. It was reported that this raises concerns that the debt-laden group might be facing challenges to seek new loans.

"When contacted, an executive of Bumi Armada told The Edge Financial Daily that the group had postponed the debt restructuring deadline to first half of next year," The Edge Financial Daily reported.

http://www.theedgemarkets.com/article/bumi-armada-says-not-default-risk-report
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Offline Teosh

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Re: Bumi Armada
« Reply #65 on: November 19, 2018, 09:49:21 AM »
 :speechless: dah cukup bottom ke ni
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Offline dan_koo

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Re: Bumi Armada
« Reply #66 on: December 05, 2018, 03:52:13 PM »
Not bad  ;) :thumbsup: :thumbsup:

Offline Teosh

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Re: Bumi Armada
« Reply #67 on: December 11, 2018, 06:10:37 AM »
Stop bleeding today bole?
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Offline rince

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Re: Bumi Armada
« Reply #68 on: December 23, 2018, 02:22:00 AM »
huge debt

Offline pearl_white

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Re: Bumi Armada
« Reply #69 on: June 19, 2019, 12:06:56 PM »
Based on the financial review of Armada with the latest addition of the 3 out of 3 GOOD NEWS, it was determined that (basically, nothing has changed from previously!) :-

PROOF – ARMADA REVENUES ARE NOT ENOUGH TO SETTLE DEBT
PROOF - 14.5 YEARS TO FULLY SETTLE DEBT IF REVENUE STABLE FOREVER BUT ITS FIRM IS ONLY UP TO 6.25 YEARS!
PROOF - NOT ENOUGH TO SETTLE INTEREST AND TAXES
PROOF – ARMADA CANNOT GET ANY MORE FINANCING

Armada’s ability to secure new contracts is likely to be 0%

PROOF - Armada has lost the momentum as a major player since 2014.
PROOF - Armada has been without a business development / sales team since 2014.
PROOF – Armada embroiled in various allegations from various countries including EU and INDONESIA.
PROOF – Armada’s strategic direction is uncertain due to controversies with its major shareholder.
PROOF – Armada’s behavior as a contractor has been one of litigation.
PROOF - You cannot bid for contracts if you do not have donor tankers.
PROOF – Armada’s recent FPSO is a lemon.

6.25 years to go or 26 Quarters to go. RM80 million net profit per Quarter optimistic assumption. That means RM2.0 billion in profits.

Rm19.6 billion confirmed sales for next 6.25 years. Actual operations profit from Rm19.6 billion is around Rm8.0 billion. Rm8.0 billion has to pay for everything under the Gross Profit line. And this doesn't include principle debt payments of Rm12.5 billion. Q results don't matter. And when oil industry recovers in 2030, Armada's assets are nearly 20 years old. End of life.

It is enough to pay off the RM13.5 billion debts (excluding interest)?

HOW TO MEET THE RM6 BILLION DEFICIT???

How much ADDITIONAL new revenue is needed for Armada?

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Around RM14 billion in new sales / revenue.
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That is not going to be achievable for Armada since it no longer has the reputation to get new contracts.

So it’s the crunch time now. What are the options available to the shareholders?

1. Take Armada private
2. Sell Armada
3. Dispose assets to continue to try to survive

1. Taking Armada private

Do you think that the main shareholders want to do so when Armada is an endless money pit with gutter reputation? Finance 101, get rid before you incur more losses.

2. Sell Armada

No one is buying Armada in this market until 2030. And the new shareholders have to deal with an incompetent management.

And new owners have to come up with an additional RM5 billion to pay off its debts.!!

3. Dispose assets to continue to survive

Assets are worth nothing as long as the market doesn’t recover until 2030. The asset are still being valued too high. Disposing assets wouldn’t be enough to settle Armada’s debts anyway.

With the review of the latest results, it was exceeding our expectations. Our view is now further reinforced that Armada will default. How much time left before Armada defaults? It would be next year when it defaults.

Despite the enthusiasm on the following: -

Speculated improvement in cash flows - Insufficient in 2020
Speculated settlement on Claire - Circa 25% of the asking compensation by Armada
Speculated award of new contracts - Nil probability
Speculated sale of assets - Highest bidder bidding at 10% of current NBVs

Armada would not be aggressively pursuing debt restructuring negotiations if the above were not in positive light. A highly anticipated default will still happen.

Given that the option to take private, to sell out and sell assets are not viable for Armada, what route will Armada take in such a event? PN17 and administrators will come in for sure.

We expect that Armada will be broken into many pieces. For the FPSOs, it would be taken over by their respective JV partners and other assets will be sold off to the highest bidder.

We expect institutional funds to lose all investments and creditors will not be paid 80% what is owed to them while debtors will be taken to court wherever possible.

As for the main shareholder, they have already clawed back their investments when they part disposed in 2011/12.

Looks like its "ride the train for as far as you can" before it breaks down.