Toyotahilux liao
Ananda Krishnan Looking To Sell Bumi Armada
ycoon T. Ananda Krishnan (pic), commonly known as AK, is looking to sell his entire 34.9% stake in Bumi Armada Bhd, Asia’s largest floating, production, storage and offloading (FPSO) company, said sources.
“Some oil and gas (O&G) service companies have been approached to take up AK’s stake in Bumi Armada,” the source told The Edge Financial Daily, adding that the deal could be settled by cash or a share swap in the purchaser’s company.
The negotiations are being conducted at shareholder level, said the source.
Nonetheless, it might not be easy for the tycoon to find a buyer given the current cautious sentiment on the O&G sector, particularly the offshore support vessel (OSV) segment where overcapacity is likely to weigh down on charter rates.
It is not known at what price the tycoon intends to part with his shares as Bumi Armada’s share price has plunged sharply in the past six months.
The company’s net assets per share was at RM1.57 as at September 30.
Based on yesterday’s closing price of RM1.16, AK’s shares are worth some RM2.4 billion, compared with a possible RM5.2 billion when Bumi Armada shares were trading at their peak early this year.
Year-to-date, the stock has fallen 53%, wiping out some RM8 billion from the company’s market capitalisation and leaving it with RM6.8 billion as at yesterday.
Bumi Armada’s share price has been on a downtrend since June when news broke that the company was facing problems with its African operations, particularly in Angola.
The company has been expanding its fleet in Africa. Currently, it has six vessels going into Angola, five in Congo and 11 in Nigeria.
It is currently the world’s fifth largest FPSO player with seven vessels in hand. The group also has a large OSV fleet consisting of about 51 vessels.
The share price plunged further when AK sold a 7.33% stake in Bumi Armada through his private entity Objektif Bersatu Sdn Bhd, giving him a current shareholding of 34.92%.
Some quarters see the tycoon’s share sale as a signal that something may not be right in the company. Nevertheless, Ananda is still the company’s largest shareholder through his private vehicle.
Other major shareholders include the Employees’ Provident Fund with 8.27%, Skim Amanah Saham Bumiputera (7.64%) and Ombak Damai Sdn Bhd (7.07%).
To make things worse, earlier this month, Bumi Armada’s long-serving chief executive officer Hassan Assad Basma tendered his resignation effective January 1, 2015.
Although he still acts as a consultant to the company until 2016, Hassan’s departure came as a surprise to many as he is still the ideal person to steer the company, having successfully pushed Bumi Armada through the 2007/2008 financial crisis.
Bumi Armada was relisted in 2011 at an initial public offer price of RM3.03, eight years after it was taken private in 2003 when the market turned tough.
Now that the O&G industry is once again sailing through rough waters, there have been talks of AK delisting Bumi Armada again.
Maybank IB Research, in a recent report, does not rule out a potential privatisation of the counter, as it was trading at around one time book value – considering dirt cheap for a leading offshore supportive vessel operator in the world.
“Operationally, we like Bumi Armada’s FPSO business model in the light of the current weak and volatile oil market environment,” the research firm added.
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Discussions
Be the first to like this. Showing 12 of 12 comments
EPF, PNB, on buying spree despite HB sells off ....Interesting
http://klse.i3investor.com/servlets/stk/announce/5210.jsp
Investment Bankers TP is on track..Pointing North......Bullish.....Interesting...
http://klse.i3investor.com/servlets/stk/pt/5210.jsp
The company's fundamentals and Oil price set to rebound to USD 90 next year......could be the reason Institution Buying Armada shares......
2014-12-20 14:52
Bumi Armada - Stable Performance
Author: PublicInvest | Publish date: Mon, 15 Dec 12:00
We remain positive on Bumi Armada (BAB), considering its major FPSO business to be less affected by oil price from its firm long -term contracts, secured with orderbook backlog of RM23.4bn, coupled with additional RM12.0bn optional extension to reaffirm earnings. Whilst the broader market is plagued by softening oil price thus potential slowdown of E&P capital expenditures, we believe BAB is well positioned to continue reaping strong cashflows from their existing portfolio amid bidding for ongoing FPSO projects. We thus maintain our Outperform recommendation with TP of RM1.77 derived from our DCF approach.
FPSO. The Group is in the process of bidding for 4 major projects in Ghana, Nigeria, Namibia and Angola which is expected to be announced between now and February. They will also be involved with 9 new bids in the Asia and Atlantic Corridor regions. Aside from orderbook replenishment, some projects such as the Armada Claire have achieved its first oil c.35,000bbl/day, while the Armada Sterling II is targeted for first oil at the C7 Field by end December to mid-January reiterating the Group’s execution abilities.
OSV. Utilization is expected to continue improving with 3Q utilization at c.74% largely attributed to new vessels but offset by lower contribution by the Class B vessels. The Group’s ongoing fleet renewal programme has 3 Class B vessels disposed and earmarked 7 vessels as held for sale.
T&I. Revenue will be driven by higher activities from the LukOil project with additional operations and maintenance (O&M) activities for the Armada Installer.
Hassan Basma’s departure was a surprise, but did little to hamper its stock price post-announcement despite his departure being viewed negatively for BAB. Hassan has been a key figure to BAB’s growth and development, especially in securing 2 of the Group’s largest contracts – Kraken and 1506. Due to family reasons we understand he has requested for early release from his employment contract, but will stay on as a consultant to the Group until mid-2016. Albeit this, we reiterate that BAB has already secured long-term contracts which will continue to sustain its performance while waiting for a new CEO’s appointment.
OUTPERFORM, with TP of RM1.77 derived from DCF valuation which we believe is reasonable considering the Group’s growth plans and potential in the FPSO space. We believe FPSOs are a safe haven as oil producers look more closely at economic viability of oil production therefore any potential shortfall of the Group’s other segments should be cushioned by the growth from FPSO.
Source: PublicInvest Research - 15 Dec 2014
2014-12-20 22:59
All analysts are doing AK's biddings. Unlike the old Armada, this one has taken on so much more debt. AK is not seeing any value in this company.
2014-12-21 00:51
Why EPF and PNB increase stake?...Undervalue?...Bumi Armada sealed US$1.2bn Madura FPSO contract...New Projects that will boost future earnings?....Oil Price stable?........Market talk other institution also buying...
Investment Bankers average TP is 3.06......So far so good....
2014-12-21 10:09
"optimuss he so old ady how can be thambi?
19/12/2014 20:04 "
===============================================
Yes! you are right! Today's generation have no respect for old folks and they are rude to the core. I don't blame them because they are brought up maids, ustazs or tuition teachers while their parents busy "making money" to bring up these BRATS.
2014-12-21 13:54
Dickyme. The new gen shocked me with their arrogance. Rude. Overconfidence n above all. Their low IQ n EQ. Virtually no analytical skill beside being a parrot.
their brain r programmed to react. Not response. Good brain response. Bad brain react
think abt it.
2014-12-21 14:02
Will KLSE let him delist / relist as he wish? KLSE is not own by AK. KLSE.
AK is old (78?). Can he wait for armada relist again?
His son / daughter are not working his business.
AK give cash to son/daughter and retire is a best choice for him.
Armada have fundamental problem and oil and gas market is bad.
Armada problem is CEO too aggressive but his trusted team are not capable to delivery.
OSV and T&I sector suffer from Russian and Africa. Profit keep drop and loss
New oil field service, marginal field division did make any business.
FPSO sector have too many problem, poor engineering design, project management mistake, delay, cost overrun.
CEO disappointed by his trusted team repeatedly. In the end CEO have to step down.
All this make AK to exit armada.
Today , cash is king.
AK is a so clever guy. You think he will spend money to take over rest of share in high price?
No, He just cash out and plan to retire and give cash to his son/daughter.
Its time for AK to enjoy retirement life.
Armada no hope.
2014-12-22 14:24
Armada is fundamental problem. CEO knew it therefore left.
armada stuck so deep in Russian luk oil. in Caspian sea area.
its T&I, OSV all in deep shit suffer huge risk. Russian !
Armada oil field service , marinal field sector didt get a single job after three year. just burn $
with PETRONAS cut capex, all die
FPSO projects full of problem, delay and cost over run,
example Armada Claire,
now Cluster 7 in deep shit cant hock up turret subsea damaged during installation.
fall of hidden problem. its design problem again like what happened on armada claire earlier this year.
that is why CEO choose to step down,
good time over.
CEO and AK much clever than you guy rugi wang on armada
you wil never able to recover your loss in this counter.
cleaver is keep away like CEO
2014-12-22 14:25
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
optimuss
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2014-12-19 20:04