KUALA LUMPUR (Dec 3): Bumi Armada Bhd, whose share price slumped to a record low of 16 sen on Nov 30, says its chief executive officer has issued an internal memo to staffs, which stated the group's efforts to pursue new work have been limited by its cashflow problem.
The memo, which was issued on Nov 27, explained that despite the group's concerted efforts to fundamentally improve its financial situation, it has not made substantial progress with its lenders or financial parties, which has forced it to "drastically reduce the company's cash outflow and limit the company's efforts to pursue new work".
Bumi Armada revealed this in a stock exchange filing in response to an unusual market activity (UMA) query from Bursa Malaysia.
It clarified that the statement was meant to highlight to employees the challenging market and financial circumstances faced by the oil and gas sector and the group, which resulted in the group having to be highly selective in the projects it is pursuing, amid ongoing discussions with those financial parties.
"The company wishes to further clarify that it is currently in active negotiations with the financiers, and target to complete the refinancing by the end of the first quarter of 2019," it said.
Bumi Armada also said the group is currently working with lenders to refinance a US$500 million debt, as disclosed in its third quarter financial report for the period ended Sept 30, 2018 (3QFY18).
In the 3QFY18 report, it had stated: “There is a continuing focus by the group on strengthening our overall balance sheet. We are working with our lenders to put in place a refinancing of our US$500 million debt, of which approximately one-third was due in October 2018. We have made a partial repayment of US$120 million in October 2018 and are looking to refinance the balance of debt into a longer-term facility. Our primary focus for the rest of 2018 and into 2019 will remain on optimising our cost structure, strengthening our balance sheet, monetisation of under-utilised assets, and collecting and generating more cash flow.”
Other than the above, it said it is not aware of any other matter that could have contributed to the UMA.
At 3.21pm, share price of Bumi Armada rose 2.5 sen or 15.62% at 18.5 sen, bringing it a market capitalisation of RM1.06 billion, after 166.74 million shares exchanged hands. It was the most actively-traded stock so far today.
Year-to-date, the counter has plunged about 76% from its closing price of 77 sen on Dec 29 last year.