KUALA LUMPUR (Feb 10): Eversendai Corp Bhd founder Tan Sri AK Nathan wants to inject his privately owned liftboat company, Vahana Offshore Sdn Bhd, into the oil and gas (O&G) and construction group to improve its bottom line.

Through its subsidiaries, Vahana Offshore owns and operates a self-propelled jack-up barge or liftboat named Vahana Aryan, which is used for maintenance, workover, well-service activities, hook-up, and commissioning and decommissioning of offshore platforms in the O&G industry.

Nathan, who is also Eversendai's group managing director, said the recurring income from Vahana Offshore will help Eversendai showcase higher profits, which in turn will prop up shareholders’ confidence.

"I think this is the best thing to do in the interest of the group to improve Eversendai's bottom line and help its share price," he told a news conference here today.

For now, the value of Vahana has yet to be determined. Nathan said it will be evaluated by an independent valuer and that the transaction will be done at arm’s length.

Besides Vahana Aryan, Vahana is building its second liftboat named Vahana Arjun, which is targeted to be completed by early 2021. The liftboat is being built by Eversendai and is currently 40% completed.

“We had to put [constructing Vahana Arjun] on hold for some time due to funding. But now that the funding is in progress, we have already restarted the project. We expect to complete the second vessel in early 2021, and we expect that vessel to go to work by June 2021,” Nathan said.

“Once the second vessel is completed, we expect its revenue to be registered in Eversendai from the second half of 2021. We have already looked at the numbers and it looks very healthy and attractive going forward,” he added.

Nathan said both vessels have secured a five-year charter contract to work in Saudi Aramco projects, which will start in June 2020 for Vahana Aryan and June 2021 for Vahana Arjun.

Besides recurring income for Eversendai, the proposed injection will also eliminate related party exposure.

Eversendai's board of directors has 30 days to consider the proposal — which Nathan will abstain from voting on due to conflict of interest.

At press time, Eversendai shares were trading unchanged at 36 sen apiece. The stock has declined over 41% in the past 12 months, in tandem with the group's declining profit performance.

In the nine months ended Sept 30, 2019, the group's net profit more than halved to RM20.98 million from RM50.50 million in the corresponding period a year ago, while revenue retreated to RM1.19 billion from RM1.21 billion.

The weakened performance was primarily due to to the loss before tax incurred by its mechanical fabrication, installation and modularisation segment, which Eversendai blamed on the underutilisation of its Ras Al Khaimah fabrication yard facility, owing to the delay in the timing of project awards.