KUALA LUMPUR (Sept 12): CIMB Research has maintained its “Add” rating on Bumi Armada Bhd (BAB) at 56 sen with a higher target price of 73 sen (from 72 sen) and said BAB announced on 7 Sep 2018 that its client for the Armada Kraken FPSO, EnQuest,had issued the final acceptance certificate for the vessel located in the North Sea.
In a note Sept 11, the research house said this is a long-awaited development for BAB, but not before it had paid, and agreed to pay, substantial penalties to EnQuest with respect to the technical issues faced.
“Maintain Add, with higher SOP-based target price of 73 sen on housekeeping tweaks.
“Upside catalysts: new project wins, legal victory over Woodside, partial asset sales to raise cash. Downside risks: need to refinance US$500m of debt due in 1-8 months,” it said.