This article first appeared in The Edge Financial Daily on April 16, 2019

KUALA LUMPUR: Barakah Offshore Petroleum Bhd group president and chief executive officer (CEO) Nik Hamdan Daud resigned yesterday, and a source familiar with the matter said it was to pave the way for the restructuring of the debt-laden company.

Nik Hamdan, who joined Barakah as an executive director in March 2012 before taking the helm in April 2016, stepped down “due to personal reasons” effective yesterday, Barakah’s stock exchange filing yesterday showed.

He will be succeeded by 54-year-old Abdul Rahim Awang, a trained auditor who has been vice-president and chief corporate officer of Barakah since September 2013.

The source close to the matter told The Edge Financial Daily that the resignation of Nik Hamdan — Barakah’s controlling shareholder with a 33.808% direct stake — was the "best action" for the company.

“The boardroom change as announced today (yesterday) was thought of as the best action that could be taken for the group to work on resolving its financial problem, especially the amount that is overdue to its creditors.

“It is also understood that the group has identified a potential new investor to negotiate the terms with its creditors, but no agreements have been signed as of now. The parties involved are still working out the numbers and will make relevant announcements after that, possibly by the end of next month,” the source added.

Last month, Barakah said in a stock exchange filing dated March 18 that its total borrowings, inclusive of its subsidiaries’, stood at RM335.6 million. Based on its balance sheet as at Dec 31, 2018, the company’s long-term liabilities were at RM172.02 million, while trade payables were at RM139.69 million.

At the time, Barakah said the amount of debt it needs to restructure was not known yet. "The board of directors of Barakah wishes to clarify that the company is still in the midst of formulating a debt restructuring scheme to settle the group’s debt,” Barakah said in a stock exchange filing dated March 18.

It was responding to an article by The Edge Malaysia weekly that was published for the week of March 18-24, 2019, citing sources, which reported that Barakah was, alongside its two main subsidiaries — PBJV Group Sdn Bhd and Kota Laksamana 101 Ltd — seeking to restructure RM726.53 million worth of debts.

Barakah shares, which have gained over 60% on a year-to-date basis, closed half a sen or 5.26% higher at 10 sen yesterday, after 19.16 million shares crossed. At its current price, the group is now valued at RM83.58 million.