Bumi Armada Bhd
(Dec 28, RM4.10)
Maintain buy at RM4.08 with target price of RM4.48: Bumi Armada has announced that its subsidiary, Bumi Armada Offshore Holdings Sdn Bhd, has exercised its call option to purchase the Rainbow River (oil tanker) for RM68 million, pursuant to a memorandum of agreement entered into with Galaxy Naviera Maritime SA, Panama, on Sept 28, 2011.
The purchase will be satisfied by internal funds with the transaction targeted to be completed in 1Q12.
The double hull 246m x 42m Aframax oil tanker, which carries a Panamanian flag, was built in 1999 by Koyo Dockyard Co Ltd and has a gross tonnage of 58,000 tonnes and dead weight tonnage of 107,000 tonnes. According to its latest voyage update, the vessel is scheduled to arrive in Singapore today.
The technical specifications of Rainbow River are consistent with the previous five floating production, storage and offloading (FPSO) conversion candidates deployed by Bumi Armada.
In our previous report, we mentioned that Bumi Armada was tendering for four FPSO contracts, including one in Vietnam (Petroliam Nasional Bhd has a 50% stake) and Malaysia (Belud field), highlighting that results on one of those tenders could be announced within a month. While details remain sketchy, we believe this purchase could signify that the sixth FPSO contract is crystalising.
We are positive on this development and expect to see further news flow relating to this deal. We are maintaining our estimates as we have incorporated two FPSO wins in 2012. Still a “buy” with fair value at RM4.48. — BIMB Securities Research, Dec 28
(Dec 28, RM4.10)
Maintain buy at RM4.08 with target price of RM4.48: Bumi Armada has announced that its subsidiary, Bumi Armada Offshore Holdings Sdn Bhd, has exercised its call option to purchase the Rainbow River (oil tanker) for RM68 million, pursuant to a memorandum of agreement entered into with Galaxy Naviera Maritime SA, Panama, on Sept 28, 2011.
The purchase will be satisfied by internal funds with the transaction targeted to be completed in 1Q12.
The double hull 246m x 42m Aframax oil tanker, which carries a Panamanian flag, was built in 1999 by Koyo Dockyard Co Ltd and has a gross tonnage of 58,000 tonnes and dead weight tonnage of 107,000 tonnes. According to its latest voyage update, the vessel is scheduled to arrive in Singapore today.
The technical specifications of Rainbow River are consistent with the previous five floating production, storage and offloading (FPSO) conversion candidates deployed by Bumi Armada.
In our previous report, we mentioned that Bumi Armada was tendering for four FPSO contracts, including one in Vietnam (Petroliam Nasional Bhd has a 50% stake) and Malaysia (Belud field), highlighting that results on one of those tenders could be announced within a month. While details remain sketchy, we believe this purchase could signify that the sixth FPSO contract is crystalising.
We are positive on this development and expect to see further news flow relating to this deal. We are maintaining our estimates as we have incorporated two FPSO wins in 2012. Still a “buy” with fair value at RM4.48. — BIMB Securities Research, Dec 28
