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Thursday, October 10, 2013

Barakah poised for growth as listed entity


KUALA LUMPUR: Barakah Offshore Petroleum Bhd, en route to a listing on the Main Market of Bursa Malaysia, is bidding for bigger job packages in the transport and installation segment of the oil and gas (O&G) sector, backed by its prized asset Kota Laksamana 101 and ability to tap into the capital market to fuel its expansion.

Barakah is better known in the industry as the PBJV Group.

“We participated in a few packages… we have a pipe-lay barge, and with the specifications (of the barge) and our track record, I believe we stand a good chance of clinching contracts,” founder of the company Nik Hamdan Daud told reporters yesterday.

He said Kota Laksamana 101, which the company has invested close to RM300mil in, was currently being chartered as an accommodation barge in Indonesian waters until end-November.

After the press conference, chief financial officer Firdauz Edmin Mokhtar said the company did not intend to lease Kota Laksamana 101 as an accommodation barge in the long run because it was built with specifications for pipeline jobs.

"Barge chartering can be lucrative, but the management is working towards being a turnkey contractor for transportation and installation of pipelines projects using Kota Laksamana 101," he said.

With the asset, the firm would also be able to bid for bigger jobs as a main contractor based on the criteria set by some of its clients, he added.

Hamdan said the company would look into investing in other assets, such as a diving support vessel, which it presently charters from a third party, as it secures more long-term contracts in the future.

The cost for such a vessel ranged from RM96mil to RM160mil, depending on its size and specifications, he explained.

“We have a growth plan and will do the investment progressively and prudently,” he said, adding that as a soon-to-be listed company, it would be able to tap into the capital market to fuel its expansion.

According to chief executive officer Syed Abdul Rahim Jaafar, the O&G concern has a record high orderbook that would keep it busy for the next two to three years.

Historically, its orderbook had been in the range of between RM200mil and RM300mil, he said.

Meanwhile, the company, which is raising RM126mil from the issuance of shares and unsecured loan stocks, will use nearly half of the proceeds as working capital.

Specifically, it plans to use RM65mil as working capital, as it remains focused on the home turf.

Abdul Rahim added that the company would also scout for opportunities abroad and that RM5mil would be used for its overseas venture. Another RM15.4mil from the proceeds would be utilised to purchase equipment.

He said it would target specific markets that it had identified as low-risk for growth.

“We would set up small offices in those markets so that we can study and be ready for opportunities when they appear,” he said.

Some of the markets that it was looking into are Brunei, Vietnam, Indonesia and Myanmar, Hamdan said.

Barakah is taking over the listing status of Vastalux Energy Bhd and expects the exercise to be concluded in November.

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