Perisai shares rise on contract termination news

PPL Shipyard ends RM1.79bil job to build two jack-up rigs

PETALING JAYA: Shares in oil and gas company, Perisai Petroleum Technology Bhd saw improved sentiment following news that it would not take delivery of two jack-up rigs from a unit of Singapore-listed Sembcorp Marine Ltd.

Shares in Perisai rose by 11% to 5 sen yesterday, following an announcement by PPL Shipyard Pte Ltd that it had terminated contract to build the two jack-up drilling rigs worth US$419.50mil (RM1.79bil).

In a filing with Bursa Malaysia dated Sept 1, the financially-distressed Perisai said the termination would not have any material impact on the company’s financials as it has already impaired the deposits paid for the order.

“The initial 20% deposits has been fully impaired as at financial period ended June 30, 2017,” it said.

Perisai pointed out the contract with PPL was payable in two portions, with an initial 20% payable upfront and the balance 80% upon delivery of the jack-up drilling rigs.

Perisai has been severely hit by the crude oil price crash that started in September 2014. It has been classified under the Practice Note 17 (PN17) category, meaning that its financials were not healthy.

Under the contract signed with PPL Shipyard in 2013, Perisai ordered two jack-up drillingrigsworthUS$208milandUS$211.5mil respectively. Perisai had taken delivery of the first rig, worth about RM640mil (about US$170mil then) in mid 2014.

The original delivery date for the second rig, called Perisai Pacific 102, was on March 31 last year. But it was deferred to Aug 31 this year.

As for the third rig, Perisai Pacific 103, the original delivery date was July 30, 2016 and it was deferred to Aug 31, 2017.

For the financial year ended June 30, 2017, Perisai registered a net loss of RM205.35mil, largely due to impairments arising from the rigs and trade receivables.

The company is also in the midst of submitting a regularisation plan to Bursa Malaysia in October under the PN17 requirements.

Perisai slipped into the PN17 status last year after it defaulted in payment of the principal and interest for the S$125 million debt paper. Towards this end, the company has appointed a principal adviser to assist in its regularisation plan.

The O&G sector was hit by an unexpected downturn as global oil prices went on a freefall since September 2014, hitting as low as below US$30 per barrel compared to a high of US$102 per barrel in mid-2014.

In April this year, the major shareholder of Perisai, Singapore-listed Ezra Holdings Ltd, voluntarily filed for bankruptcy in the US.