KUALA LUMPUR: Bumi Armada Bhd is selling subsidiaries which own three ice class ships for US$44.5mil (RM186.6mil) cash to Russian oil and gas giant PJSC Lukoil.
Ice class ships are capable of maintaining safe and efficient navigation in ice-infested waters.
The three ships, namely, the Bumi Uray, Bumi Pokachi and Bumi Naryan Mar vessels have been working for Lukoil-Nizhnevolzhskneft Ltd in the Caspian Sea, Russia since 2016 under three charter party contracts.
In a filing with Bursa Malaysia, the international offshore energy facilities and services provider said the ships are owned by three wholly-owned indirect subsidiaries of Bumi Armada, which together with Bumi Armada Marine LLC, are collectively called the ice class vessel companies.
The group said its subsidiaries Bumi Armada Singapore Holdings Pte Ltd, Bumi Armada Offshore Contractor Ltd and Bumi Armada Russia Holdings Ltd had yesterday entered into a sale and purchase agreement on the disposal of the companies, with AC Management Co Ltd and KN Holding Ltd which are both wholly-owned by PJSC Lukoil.
For the nine months ended Sept 30, 2021, the ice class vessel companies recorded a combined loss after tax of RM56.6mil and have combined net assets including capital contribution of RM219.9mil.
The proposed deal, which is due to be completed by the first quarter of this year, is expected to result in a loss on disposal of subsidiaries of RM25mil to Bumi Armada.
The group said the proposed deal was in line with its strategic plans and intention to exit the offshore marine services business.
“It will also generate cash inflow to enable Bumi Armada to repay and reduce its corporate debt.
“It will allow the group to redeploy and focus its resources on its core activities,” said the group.
About US$38mil (RM159.3mil) of the proceeds from the deal will be used to reduce the group’s corporate debt while the balance US$6.5mil (RM27.25mil) will be retained for working capital purposes.