Bumi  Armada  announced  that  due  to  family  reasons,  Mr  Hassan Basma, the group's CEO and Executive Director,  has requested for an  early  release  of  his  contract  of  employment.  Basma  will relinquish his positions with effect from 1 January 2015. Basma will continue  to  be  engaged  as  a  consultant  to  the  group,  where required  and  appropriate,  on  specific  projects.  The  Board  has initiated steps to search for a new CEO. Meanwhile Mr Chan Chee Beng, a member of the Board since 2003, has been re-designated as Executive Director and Acting CEO. (Source: Bursa Malaysia).

Comments:  We  were  surprised  by  Hassan's  resignation.  We  understand that  Hassan  resigned  due  to  family  reasons  and  the  group's  business fundamentals  are  largely  intact.  While  the  change  in  CEO  may  have  a short-term  impact  to  the  group's  business  operation,  we  opine  that  Bumi Armada's  experienced  management  team  and  established  business processes  will  help  to  minimise  disruption  and  ensure  smooth  transition. Maintain BUY with an unchanged SOTP-derived TP of RM1.70.

Source: Affin Hwang Capital Research - 8 Dec 2014