KUALA LUMPUR: Shares in Bumi Armada fell 7.4% in early trade Thursday after the company announced a refinancing deal to escapes liquidation.
The loss-making company shed 7.41%, or two sen to 25 sen. It is the most actively counter on Bursa Malaysia with over 144.7 million shares done.
Bumi Armada announced that the group has refinanced its unsecured term loans of US$380mil (RM1.57bil) and revolving credit facilities of US$280mil (RM1.16bil) into a single facility consisting of Tranche 1 facility of US$260mil, and Tranche 2 facility of US$400mil.
The offshore energy facilities and services provider said the loans will be repayable over two and five years respectively, from the closing date of the facility agreement.
Bumi Armada chief executive officer Leon Harland said the refinancing of the short-term corporate debt alleviates one of the group's main current exposures.
In FY18 ended Dec 31, Bumi Armada recorded a net loss of RM2.3bil on the back of a total revenue of RM2.42bil.
Ananda Krishnan is the controlling shareholder of Bumi Armada, holding a 34.87% stake via Objektif Bersatu Sdn Bhd.
Kenanga has maintained its underperform rating on Bumi Armada and raised its target price to 25 sen from the previously distressed valuation of nine sen.
It noted that Bumi Armada’s high net gearing remains a key concern despite its announcement that it has secured US$660mil in debt refinancing.
"This still does not mitigate the company’s high level of borrowings, amounting to RM10.4b as at end-FY18 - implying an alarming net-gearing level of 2.7x," Kenanga said.