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Friday, December 12, 2014

Bumi Armada signs RM3.98bil contract with Indonesian company

PETALING JAYA: Shipping company Bumi Armada Bhd has signed a US$1.18bil (RM3.98bil) contract to supply one floating, production, storage and offloading vessel (FPSO) with Husky-CNOOC Madura Ltd in Indonesia.
The letter of intent was first announced to Bursa Malaysia on Aug 19 and it has taken almost four months until the contract was officially signed.
Bumi Armada initially extended the execution period for the contract on Oct 14. Then on Oct 31, it agreed to further extend the signing until Nov 6 to finalise the required clarifications.
It then filed an announcement with the local bourse saying that it was extending further the period of execution pending relevant internal approvals to execute the contract.
About three weeks later, it issued another announcement stating that it was extending the signing to enable parties to procure relevant internal approvals to execute the contract.
The contract was issued to a consortium comprising Bumi Armada’s unit, Bumi Armada Offshore Holdings Ltd and its joint venture company PT Armada Gema Nusantara at the Madura BD Field Development in Indonesia.
The contract is for a firm charter period of 10 years with options of five annual extensions. The contract is expected to commence operations in the fourth quarter of 2016.
The company said the contract would contribute positively to the group’s earnings from the quarter and financial year ending Dec 31, 2014 onwards.
Bumi Armada recently saw a significant selldown of its shares due largely to poor sentiments related with oil and gas service providers on the back of the falling crude oil price. Since early October, Bumi Armada has seen about RM5bil shaved off from its market capitalisation. Yesterday, its shares closed at RM1.03, down by some 58% from its year-to-date high of RM2.49.

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