Malaysia-listed offshore services provider Bumi Armada has revised its rights proceeds of MYR1.98 billion (USD526.9 million) with more funds allocated for its floating production, storage and offloading (FPSO) and new floating gas solutions (FGS) business units.
“The allocation to the FPSO business unit has been increased from MYR1.4 billion to MYR1.52 billion. The increased allocation of MYR1.52 billion will be used to cover capital expenditure in both the FPSO and FGS business units,” said Bumi Armada in its filing to Bursa Malaysia.
The company stated that the capital expenditure will encompass FPSOs of any liquid or gas production capacity with previous capacity of 70,000 barrels per day or more in any location, as well as capital expenditure in gas related vessels such as floating liquefied natural gas units, floating storage and regasification units, and floating storage units under the FGS business unit.
Bumi Armada will also allocate MYR80 million of rights proceeds, entirely from the recent dissolution of its oilfield services business unit, to its offshore support vessel (OSV) business unit.
“The reallocation of the rights proceeds reflects Bumi Armada group’s overall strategy of focusing on its core FPSO business and enhancing its OSV and FGS capabilities. The board believes that this is an appropriate strategy to weather the current challenges in the offshore oil and gas sector, brought about by the decline in oil prices since the second half of 2014,” explained Bumi Armada in the relocation of the rights proceed.
In the meantime, the company has also reallocated MYR24.8 million of rights proceeds for its corporate exercise, completed on October 2014, as compared with previous allocation of MYR55 million. The balance of MYR30.2 million had been reallocated to be used for general working capital requirements.