KUCHING: Barakah Offshore Petroleum Bhd will continue to engage with its lenders and creditors for an amicable debt settlement proposal.
A 90-day order granted by the Kuala Lumpur High Court to Barakah and its 100 per cent-owned PBJV Group Sdn Bhd restraining all proceedings and actions brought against them expired on Jan 14.
Barakah and PBJV had applied for the order, which was granted on Oct 12, 2018 as part of proactive measures by Barakah to manage its group debt levels.
The order allowed the group to negotiate terms with its lenders and creditors without having the threat of any proceeding and actions being brought against the company.
Barakah said its board of directors would seek all legal avenues to protect the group when necessary while a debt resettlement proposal is being negotiated with its lenders and creditors.
“None of the Barakah group’s lenders has called for an event of default on any of the Barakah group’s financing facilities,” the company said in a filing with Bursa Malaysia.
Barakah group’s total borrowings stood at RM225 million as at Dec 31, 2017 (FY-2017), which was lower than RM256 million as at FY-2016, according to group president and chief executive officer Nik Hamdan Daud in the company’s 2017 annual report.
However, the group net assets fell sharply to RM203 million in FY-2017 from RM423 million in FY-2016 as a result of the comprehensive loss of RM220 million in FY-2017.
Its cash balance dropped by RM132 million to RM88 million in FY-2017 from RM220 million in FY-2016,
“The group recorded impairment of value for its pipe lay barge for about RM44 million after restating the net book value of the barge from US$76 million to US$65 million.
“Our group net gearing ratio as at end of FY-2017 increased to 0.46 times. This is consequent to the sharp drop in the group’s shareholders fund even though total borrowing for the year was lower.
“The group has insufficient trade receivables to pay for trading payables. Nevertheless, the group has fixed deposits to cover for the shortfall,” said Nik Hamdan.
Nik Hamdan said the group managed to get a deferment for the principal repayment of the pipe lay barge’s loan, which would commence in FY-2019.
Miri-based Samling Energy Sdn Bhd emerged as a new substantial shareholder in Barakah in 2017.
As of March 30, 2018, Samling Energy, Tan Sri Yaw Teck Seng @ Hiew Teck Seng, Datuk Yaw Chee Ming and United Power Holdings Sdn Bhd have a collective 13.57 per cent stake in Barakah.
As it become a substantial shareholder, Samling Energy’s representative Datuk Joseph Lau was appointed to the Barakah board.
Lau resigned later, citing heavy work commitment as the reason, and he was replaced by Datuk Chew Theam Hock, 57, as Barakah non-independent non-executive director. Chew was a former partner/executive director of KPMG Malaysia.
Barakah is an investment holding company while PBJV started its business in offshore pipeline services. PBJV has since grown to become one of Malaysia’s leading companies in pipeline services and has expanded its business into offshore transportation and installation works, hook-up and commissioning, onshore construction, underwater services and chartering of marine vessels and equipment.
In FY-2017, Barakah group secured RM282 million new work orders from on-going and new contracts, which was, however, significantly lower as compared to some RM1 billion secured in 2016.
One notable project Barakah carried out in FY-2017 was the hook-up and commissioning work for Petronas floating liquefied natural gas vessel.
In the first nine months of FY-2018, Barakah group reported net loss of about RM40.5 million on revenue of RM173 million as compared to loss of RM56 million and RM102.8 million respectively in FY-2017.
In July and August last year, PBJV secured several new and extension contracts in the oil and gas sector.
One of the new contracts is from Sapura Exploration and Production (PM) Inc for the provision of Pan Malaysia maintenance, construction and modification contract for 2018-2023 Package A (West Malaysia).
The scope of the contract include maintenance, construction and modification work for structure and facilities for the client’s oil and gas fields, offshore Peninsular Malaysia.
Another new contract came from Enquest Petroleum Production Malaysia Ltd for the provision of Pan Malaysia maintenance, construction and modification contract for 2018-2023 Package A.
PBJV was given extension by Petronas Gas Bhd for the provision of repair and maintenance of Sabah Sarawak gas pipeline for an additional one year until November 30, 2018.
Petronas also granted a conditional contract extension to PBJV for the provision of transportation and installation of offshore facilities until Dec 26, 2019. The contract include transportation and installation of facilities, such as pipelines, structure and related equipment for offshore oil and gas fields for Petronas and production agreement contractors within Malaysia. – Alvin Tang
