Buoyant outlook- Bumi Armada

Buoyant outlook By Zurinna Raja Adam zurinna@nstp.com.my 2011/06/13 Singapore: Bumi Armada Berhad, the country's largest offshore supply vessel (OSV) operator, plans to be among the top five floating production, storage and offloading (FPSO) vessel player in the world by 2014. Bumi Armada, enroute to a listing on the Main Market of Bursa Malaysia, currently has 43 OSVs in its fleet, but is banking on making a big splash in the FPSO field. It currently is the eighth largest FPSO player in the world serving some 22 countries across Asia, Africa and Latin America. The group currently owns three FPSOs and aims to add at least one more vessel each year. It has a projected investment of between RM6 billion and RM7 billion over the next three years. Bumi Armada plans to raise nearly US$1 billion (RM3.02 billion) from its initial public offer (IPO), which could take place by as early as this month. The IPO, one of the largest announced in Southeast Asia this year, has been delayed several times over the past few years. "We are going to the capital market to have a good dose of equity. We believe this exercise will help to grow the company further," said director and chief executive officer Hassan Basma in Singapore. Bumi Armada was privatised in 2003 by tycoon T. Ananda Krishnan, who is the major shareholder of the company via its company Usaha Tegas Sdn Bhd. A planned relisting in 2008 was delayed due to the global financial crisis. Over the weekend, Bumi Armada announced the completion of its third FPSO, Armada TGT 1, which will leave Keppel Shipyard in Tuas for Vietnam to work for Hoang Long joint operating company next month. The first oil production, meanwhile, is scheduled for August 2011. "The conversion of our FPSO with production capacity of 55,000 barrels per day, was completed on schedule in 22 months. As we speak, our teams are at site installing the preset mooring system, midway arch and flexible risers in preparation for her arrival and the start of a seven-year charter," said Hassan. The Bumi Armada and Vietnamese group Vietsovpetro (VSP) alliance was awarded the contract in November 2009 for the leasing and operation of the vessel for a fixed time charter of seven years with the option to extend up to 15 years. Capital expenditure involved is about US$350 million (RM1.05 billion) for the vessel with returns of US$700 million (RM2.1 billion) paid yearly over the next seven years. Bumi Armada specialises in offshore support activities and is the only Malaysian company that owns FPSO vessels which carry a pre-mium lease rate. Its first two FPSOs Armada Perkasa and Armada Perdana have been operating off Nigeria since March 2008 and July 2009 respectively. FPSO division commands about 48 per cent of the group's revenue.

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