Bumi Armada’s risk profile continues to ‘substantively improve’

KOTA KINABALU: Analysts continue to view Bumi Armada Bhd's (Bumi Armada) risk profile as substantively improved in spite of the group's many notes.

AmInvestment Bank Bhd (AmInvestment Bank) continued to view the risk profile of the group as substantively improved with Bumi Armada's clientele's upcoming full acceptances of the floating production, storage and offloading (FPSO) vessels Olombendo and Kraken, supported by minimal fourth quarter of financial year 2017 (4QFY17) impairment charges.

However, Bumi Armada recently received a notice from Erin Petroleum Nigeria Ltd (Erin) and from a third party on Armada Perdana's crude oil.

In a filing on Bursa Malaysia, Bumi Armada announced that wholly-owned subsidiary Bumi Armada (Singapore) Pte Ltd (BASPL) had on April 11, 2018 received a notice from Erin Petroleum Nigeria Ltd (EPNL) among others, advising of a purported “Force Majeure Event” and requesting immediate, orderly shutdown of operations on the FPSO Armada Perdana (Armada Perdana).

“The company had also received a notice of seizure/attachment of goods from a third party informing that the entire crude oil produced and to be produced and stored in Armada Perdana has been seized/attached by a Writ of Attachment of the Federal High Court, Lagos, in relation to legal proceedings to which the Bumi Armada group is not a party.

“The company had sought clarifications from EPNL on such notice of seizure/attachment of goods but EPNL has not responded to the company despite numerous reminders,” the group said.