Entered at 0.155, still holding.
Reiterate highest conviction call, recommend strong buy until 0.195/0.20.
Continue holding if breached 0.20 with breakout volume till 0.25.

Ananda Krishnan and others will now have funds to buy into FPSO private trust structure, and Armada can deleverage.

The likelihood of bankers forcing a default by Armada is close to zero, reasons below:

1) Bankers don't want to call a default and seize the vessels collateral. They are not going to manage the vessels, or figure out how to sell the vessels to get back their money. A fire sale will only get back 20 cents on the dollar. Better to leave Armada operating with fixed FPSO charter cashflow to repay over 7 years. They will be paid in full with interest easily. Just a matter of time and matching debt tenure with underlying asset cash flow.

2) For the local lenders like Maybank etc., bankrupting Armada means you don't give face to Ananda Krishnan, EPF and Amanah Saham. This will not happen.

If it can break 0.20, it will rally strongly to 0.25.
Reiterate highest conviction call, recommend strong buy.

Reiterate highest conviction call. Recommend strong buy.

mikekim After being so extremely battered down, any macro positives (e.g trade war de-escalation with China slashing auto tariff) will push Armada back up.

Today will close up.
12/12/2018 08:57

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Reiterate highest conviction call, recommend strong buy

Those who bought earlier at 0.15-155, congrats, don't sell yet, hold until at least 0.195-0.20.
Hold through the year end Santa rally.

Thereafter, can sell if you want, and wait to buyback on trade war jitters. There will be a day where Trump tweets some shit threatening China that tariff will be imposed if there's no deal in 90 days.

Then all news reports will come out "global stocks retreat on renewed trade war jitters", everyone becomes jittery again, Armada drops 5-10% back to 0.18 maybe.

Then that's the time you buy back.

This will be my strategy.

it will continue going up to at least 20 cents.

just 6 months ago when it was 80 cents, it would have been unimaginable to get it at this price.

there has been little change in the company's fundamentals except the non-cash impairments, which is on paper only.

The only thing that changed? Sentiment.

If sentiment can bring the price down from 80 cents to 15 cents, sentiment can also bring it back up to 20,30,40 cents easily.

At 15 cents, what have we gotta lose? At most, it goes down to 10 cents.

The upside? It could go back to 40 cents once debt refinancing is successful and short term liquidity pressure is fixed.

mikekim After being so extremely battered down, any macro positives (e.g trade war de-escalation with China slashing auto tariff) will push Armada back up.

Today will close up.
12/12/2018 08:57

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Reiterate highest conviction call, recommend strong buy

Year end window dressing is also likely to push it back up closer to 20 cents. Enter now to ride on the Santa rally.

And finally with all the news reports and headlines about how incompetent and shitty Armada’s management has been doing, the pressure to deliver is significantly amped up. They can’t just “sit back, relax and see how” now.

After being so extremely battered down, any macro positives (e.g trade war de-escalation with China slashing auto tariff) will push Armada back up.

Today will close up.

Trade war made some progress to de-escalate.
Market sentiment is likely to be good tomorrow.
Look forward to a few bids rebound.

Thanks InvestorKing, you’re correct.

1) Refinance RM2,080,409,000 of Unsecured Term Loan into 7-10 year loan
2) Reclassify RM1,890,795,000 of Secured Kraken Term Loan into 7-10 year loan

This way, RM4bn can be taken off current liability and current ratio will go back to 1.0x.
Repay RM400m a year over 10 years with secured FPSO fixed charter.

Share price easily double once this is executed. So simple.

The entire finance team and management dunno spend the past 2 years doing what.
Freaking dreaming.

They should have started negotiating the refinancing earlier if they were willing to pay the US$120m repayment in Oct 2018. That would have been a strong leverage to encourage the banks to agree to refinance the rest of the US$380m into longer term debt to better match asset cashflow. BA also has a good reputation and has never defaulted its loans.

They also need to reclassify the RM1.9bn Kraken term loan to long term. That will further de-risk the balance sheet.

Damn cuckoo brain management and board went to borrow short term against long term nature of assets in the first place. It's like borrowing from bank 90% to buy a house and fully repay in 1 year instead of 30 years. Of course need to refinance this shit.

0.155 x4 times touched resistance line.
Strong rebound coming, just need a bit of a good news.
Also, in a few weeks time, fund managers will do window dressing.

Actually, the board and management of Armada noticed the debt issue since 2017.
Look at Page 82 of Annual Report 2017 on risk management:

"Liquidity position of the Group is key to continued successful operations.The lack of liquidity could potentially impact the ability of the Group to meet its repayment obligations of its borrowings as well as impact its ability to meet operational cost obligations. It would also restrict the ability of the Group to bid for new projects which would require additional funding."

They had one whole year before the debt repayment deadline to restructure the debt and they did not take any proactive steps to refinance the debt before it becomes due. And it finally blew up, so now this Leon Harland dude sends an internal memo to employee saying that the debt refinancing discussions with lenders had little progress, hence they need to drastically reduce cash outflow to preserve cash for debt repayment, hence cannot take on new project.

Seriously, wtf.

Frankly I am so aghast at the utter incompetency of the people running Bumi Armada. It is in the hands of these people that the share price crashed from RM0.95 in May to RM0.15 today, yet they are still drawing their fat salaries and enjoying all their benefits despite the super shitty performance.

Usaha Tegas, EPF and Amanah Saham are all sitting passively at the side, seeing their investment destroyed and doing nothing. Usaha Tegas it's up to them, it's AK's own money, he wants to throw money down the drain it's fine. But EPF and Amanah Saham's money are the people's money and the people managing them have the fiduciary duty to proactively manage these.

But you know what, come next AGM, when the vote to reelect the Board and management incentive plans come to play, we will still see majority of shareholders approving these ridiculous jokers to stay on.

Also, look at the news on the appointment of new CFO.

They hired Luke Targett as new CFO but retained the old CFO Pierre G. Savy in the company?

Why do we need two of them? Another waste of RM2-3m a year.

Look at the Board Chairman, Tunku Ali:

http://www.bumiarmada.com/Web/WebPage.aspx?p0=317&p1=317&p2=0

Mckinsey Consultant (classic bullshitters)
Themed Attractions Resorts and Hotels board (hospitality industry)
Iskandar Malaysia Studios (media industry)
Propertyguru Malaysia charman (property industry)

Where the hell is O&G experience? We expect this guy to give directions to a complex O&G MNC based on what merits?

Look at Armada's management team:

http://www.bumiarmada.com/88_87_87/Web/WebPage/Management-Team/About-Us.html

So many white guys drawing highly expensive expat package that needs to be paid by shareholders.

Leon Harland - CEO
Luke C. Targett - CFO
Jim Ellis - SVP, Head of FPSO
Hans Rausch - Head of Supply Chain
John Leemeijer - VP of Projects
Karen Lawrie - Genral Counsel

Why do we need all these guys? Have they even done a single good job in 2018 so far? No.

Just fire all these useless, expensive white figureheads. No action, talk tonnes of bullshit only.

So pissed off.

It has rebounded more than 3 times at 0.155, signalling consolidation.
I'm betting it will go up.

0.155 is the resistance support line. Price rebounds everytime it touches 0.155 in the past week.

Leon Harland, I suggest you go back to university and enrol on some marketing course to learn how to market Armada better to investors. This guy really has no clue at all on how to manage investor's sentiment and does not know how to craft the right message to send to the market.

He will be a good worker/manager reporting to a CEO. But really, he is not CEO material and is punching way above his weight. He was merely a VP at his previous job and got catapulted to CEO succeeeding Hassan Basma. I guess he never progressed his ability beyond VP.

Actually, the recent quarterly results is very good on cash basis.

The impairment of OSV is really a non-cash, on paper thing. Usually, markets don't over react to impairment, but because of this debt restucturing thing, the whole thing got blown out of proportion.

It's quite obvious that the CFO wants Armada to bite the bullet now and start from a low base for his compensation to be very fat when Armada turns around. Basically, just impair the crap out of everything and reduce depreciation charge in coming quarters, showing nice handsome profit growth numbers.

Predicting the psychology and motivation of management is key here.

20m cash is sufficient to push it back to RM0.20
50m cash will push it beyond RM0.25

Although Usaha Tegas, the Board and Management are super lousy, I think their lousiness have been fully priced in at 0.155.

Recommend strong buy with highest conviction call.

Bought 1,625,000 shares.

The entry price now is essentially betting whether Armada is a bankruptcy company.

I bet not.

This is not a bankrupt company. Armada’s balance sheet has been like this since Q3 2017 when the debt got reclassified and it remained at around 0.7-0.8.

The cash flow from fixed FPSO charter will pare down debt over time in 1-2 years.

When trade war, brexit, trump, oil price slump is over in 1-2 years, both FPSO and OSV segment will rebound. With a lower debt level at that time, banks will be willing to lend to Armada again or Armada can draw down the Euro MTN.

0.155 entry
0.195 exit

Rinse and repeat

0.145 cut loss

Partially. Will continue to buy more tmrw.
Market jittery over trade war and brexit this week.
OPEC+ cut not priced in yet in O&G stocks.

Thanks to the incompetence of Armada's management, entry at 0.155 is possible.

Thanks InvestorKING. I have already bought it at 0.155.

Lol, I don't know how Leon Harland can still be so thick face and stay at the helm.

Leon, if you somehow read this forum, I think you should find a hole and hide in shame.

Really, just resign already, you are really not CEO material and not there yet.

Leon Harland needs to be sacked. Since he joined in 2016, Armada dropped from RM0.75 to RM0.15, around 80%, and is the Top 10 worst performing stock in Bursa in YTD 2018.

Time and time again it's proven that he does not know how to properly communicate with investors. Sending a material internal memo to employees like that just create insider trading opportunities, which is a gross violation of bursa disclosure rules. I'm surprised bursa did not pursue this further and issue a warning.

Sadly, the board is no better. Look at the board chairman Tunku Ali. He has no experience in the O&G sector at all before. No idea how he qualifies to become Chairman. Oh well.

Also, too many expensive white expats in the company incurring massive expenses without delivering any shit at all in 2018. They only had 1 most important job, which they knew well ahead since 2017 as flagged out in their annual report, that is to restructure the ST debt to LT debt due to the heavy mismatch of debt tenure and asset cashflow. Still, they fail miserably.

At the end of the day, they still go home with multi million dollars package, living in a big nice bungalow with luxury car with driver paid by the company, sending their kids to international school, travelling in first/business class, playing golf on weekends and go back to their home country richer when their contract is up.

The losers? Shareholders of course.

Hi guys, I'm back.
Cut loss earlier at RM0.35+.
Been patiently waiting and refrained from commenting.
Now seems ripe to re-enter at RM0.155 after consolidation in the past 3 days.
Bought in with the sales proceeds earlier and got around 2.25x more shares.

Armada's cash on balance sheet of RM1.5bn and cash generation of ~RM300m per quarter will still be able to roughly repay the US$380m debt in Q1 2019, in the worst case scenario if it doesn't get refinanced.

The FPSO with stable, recurrent cashflow should definitely not be valued at 0.2x P/B.
The negative sentiment on this stock is at its peak now judging from the newsflow.
Could drop a bit more and touch RM0.15 over the course of this week on trade war fears - the whole bursa is not doing well. But resistance is very strong at RM0.15-155.

2018 has been a tough year - been wrong many times trying to catch the falling knife on this stock.
But the share price is so so so battered now so I'm going to try to catch the falling knife one more time.

lol, this is not a stock for speculation. you need to hold for many months.
those who monitor daily closely not suited for this stock.

Budget uncertainty risk going to be removed soon!

Clearer policy directions, less uncertainty, foreign investors coming back in the latter part of next week, after US mid terms and Iran sanctions.

All those who wanted to sit on the sidelines already sold down.
Last 1.5 hours (2.30pm - 4pm) for cheap sale.

Congrats superbull11, hope you made some money.

Your call of sell Armada at 0.385 and buy Presbhd at 0.60 as at 1/11/2018 has made +5% in 1 day, so far.

Some free goodies for you guys - JP Morgan report extract on Karoon FPSO:

"Given that Armada Claire is likely to be redeployed for this project, the incremental capex is likely to be manageable in our view (~US$200-300mn in our view)."

but i did sell some at 0.44 earlier and re-entered at lower price.
so the strategy here is to slowly average down over a few months.
after that slowly wait for 6 quarters.

tide is turning.
0.385 support is impenetrable.
last chance to buy before Nov 2

i see, ok, so your call is sell Armada @ 0.385, and buy Presbhd at 0.60 as at 3.43pm ,1/Nov/2018.

Thanks for the free tip. So now at 60.5 sen, buy or sell?

don't worry, i am retail.

Below RM0.40 is a perfect storm entry price:

1) Budget uncertainty, irrational fears by foreign investors
2) Debt overhang which is likely resolved but unannounced
3) Recent Kraken impairment which led to a large, single quarter PAT loss, which is just paper loss anyway and not cash loss
4) US-China trade war
5) US rate hike
6) Fear of slowing global growth, reducing oil price from US$80 to US$75

The price now seems to have priced in all the above factors.

So now I just buy in, sit tight, and wait QR patiently hehe and check here maybe once a week.

Goodluck all!

I predict Budget 2019 will not be as bad as people imagine.
Old hands like Zeti will advise Mahathir and Lim Guan Eng properly:

https://www.freemalaysiatoday.com/category/nation/2018/10/31/budget-2019-to-be-inclusive-benefit-most-malaysians-says-zeti/

my weighted average entry price now is below 50 cents.

very relaxed.
TP back to RM0.80 in 18 months (6 QRs).

bought 825,000 shares @ 0.39 per share 5 mins ago.

that's true.
goodbye guys, see you next QR.