KUALA LUMPUR: Barakah Offshore Petroleum Bhd
is seeing selling pressure in early Thursday trade on news that its subsidiary had defaulted on its loan payments.
At 9.08am, the stock was down 1.5 sen or 21.43% to 5.5 sen on the back of 13.84 million shares done.
On Tuesday, it announced its unit, Kota Laksamana 101 Ltd, had received a notice of demand from Export-Import Bank of Malaysia (Exim Bank) for US$2.65mil owed under its Ijarah facility agreement.
In the statement, Barakah said it is in the midst of finalising a comprehensive plan, which may include restructuring all its banking facilities.
"The lack of financial support from financial institutions is expected to have a material adverse impact on the business and operations of the group," it said.
Barakah said it would endeavour to continue its other remaining business operations notwithstanding the default and will engage with the lenders and suppliers for their continuous support.
Its subsidiary's loan with Exim Bank was for the financing of the pipe lay barge Kota Laksamana 101.
The drawdown amount of the loan was US$57.46mil in August 2014 while the total amount outstanding at May 16, 2019 was US$42.32mil.
"The monthly repayment for the loan is on a step-up basis for the duration of the loan until 2024. The monthly repayment of the loan pursuant to the agreement for the calendar year 2019 is US$600,000 a month which includes the applicable profit rate," said Barakah.