Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on April 24, 2019

KUALA LUMPUR: Barakah Offshore Petroleum Bhd has identified white knights to inject fresh capital into the group and secured pledges from its larger creditors to support its restructuring plan.

Its acting chief executive officer (CEO), Abdul Rahim Awang, said after discussing with the larger creditors, he expects to finalise the debt-restructuring scheme by next month.

“We have spoken to the larger creditors and they are willing to support us. So we have two very good backings, from the white knight and the creditors. The scheme now needs to be finalised, and we are looking at doing that within the next month or so.

“We hope to at least resolve this matter with creditors, within the next two to three months. We need 75% of the creditors to support our restructuring scheme, and we are fairly confident to secure that,” he added.

Abdul Rahim, who was appointed to succeed Nik Hamdan Daud as CEO last week, acknowledged that there are many questions that the group needs to answer on the sudden leadership change.

“This is the second week for me in this position, obviously when we announced that Nik is stepping down as CEO, there are many questions.

“Perhaps I can mention here that Nik stepped down because of personal reasons, and because of the situation that we are in. The board and he believe that we need a fresh person to be a caretaker of the group while we go through this restructuring with the creditors,” he said.

Abdul Rahim also said the Barakah shares recently sold by Nik Hamdan were absorbed in the open market.

“This was forced selling by Kenanga [Investment Bank] — a small amount [of shares] every time so that the market can absorb. It was not by choice, [but] because of his margin position with Kenanga, and we don’t know at what level his margin would be settled, because that is his personal dealings.”

Abdul Rahim said apart from restructuring debts, which involves some RM335.6 million, Barakah is also looking for various ways to strengthen the group’s earnings.

“We know that we also need to strengthen our business, so while we are focusing our efforts to restructure the debt position of the company, we also need to look at the business aspect of it, which is why we signed the memorandum of understanding (MoU) with Vallianz.

 

Barakah signs MoU with Vallianz

Barakah inked a two-year MoU with Singapore Catalist Board-listed Vallianz Holdings Ltd yesterday for a strategic alliance for both parties to explore business opportunities in Malaysia and the Middle East.

“This is one of the first MoUs we signed after Nik stepped down. I think there will be more MoUs that we are going to sign,” he said.

Abdul Rahim said the main purpose of this MoU was to expand the group’s market reach by enabling it to make competitive bid for overseas tenders, and both parties are now collaborating to secure a new work order from the Middle East. He, however, declined to reveal further details on the work order.

Currently, he said Barakah’s order book stands at about RM600 million, consisting of five production-sharing contracts and repair and maintenance works for the Sabah-Sarawak Gas Pipeline.

Vallianz serves oil majors and national oil companies worldwide, and focuses on supporting customers’ offshore oil and gas exploration and production operations. It owns and operates a fleet of 76 offshore support vessels and covers markets in the Middle East, Asia-Pacific and Latin America.

Vallianz is 57.67%-owned by Rawabi Holding Company Ltd, a Saudi company established in 1980.

Vallianz and Barakah said by joining forces, both parties are able to leverage on each other’s strengths to expand their scope of services, technical capabilities and geographical reach along the oil and gas value chain.

Under the MoU, Barakah will offer its engineering and operational capabilities to support Vallianz’s existing and future projects.

Barakah said this includes technical consultation, feasibility studies, front-end engineering design and project engineering services, among others.

It said the project scope also covers future co-tender arrangements for offshore projects which are deemed suitable by both parties.

Barakah’s share price gained half a sen or 5.56% to 9.5 sen yesterday, for a market capitalisation of RM79.4 million.

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