Bumi Armada’s 30%-owned JV secures India FPSO project

PETALING JAYA: A joint-venture (JV) company that is 30% owned by Bumi Armada Bhd has secured a floating production, storage and offloading vessel (FPSO) contract from India’s state-owned oil company, Oil and Natural Gas Corp Ltd (ONGC).

The JV company, Shapoorji Pallonji Bumi Armada Godavari Pte Ltd, is 70% owned by Shapoorji Pallonji Oil & Gas Pte Ltd of India.

According to a statement by Bumi Armada, the contract runs for a fixed period of nine years and is valued at about US$2.1bil (about RM8.8bil).

“ONGC has the option to extend the contract for up to seven years on an annual basis and if fully exercised, the extensions would be worth approximately US$655mil (about RM2.7bil),” it said.

“This is a very positive result for Bumi Armada. We are extremely proud that this JV has been awarded the third FPSO project with ONGC. This JV has been a very successful partnership, this being our third FPSO project together in India and fourth in total,” Bumi Armada executive director and CEO Leon Harland said in the statement.

“I would like to personally thank everyone involved in securing this project. It will add value to Bumi Armada, going forward,” he added.

This development comes soon after it refinanced its debt at the end of last month, helping Bumi Armada avert a bankruptcy and sending strong trading action on its shares in the days that entailed.

Bumi Armada successfully restructured US$660mil of borrowings that were due almost immediately last month.

These debts are made up of US$380mil of unsecured term loans and US$280mil of revolving credit facilities with a tranche (US$260mil) to be repaid over two years and another tranche (US$400mil) that will be repaid over five years.

CGS CIMB had earlier said that with the successful debt refinancing exercise, an equity issuance would no longer be necessary. However, it noted that Bumi Armada still had “a long to-do” list.

Source: TheStar