Perdana Petroleum ends 13% lower on debt restructuring plans


Perdana Petroleum Bhd’s share price closed 12.9% lower at 27 sen with 12.25 million shares traded, driven by investors’ concerns on its debt restructuring plans.

Within the past month, the group’s share price has been moving downwards from its closing price of 42 sen on April 24.

On Tuesday, Perdana Petroleum announced that it expects to complete its debt restructuring exercise by the end of this year, allowing it to trim its massive debts and resolve capital issues.

Subsequently, the company’s share price fell on early trading of the same day by 7.25% to 32 sen with over 4.73 million shares traded, closing lower at 31 sen, after having swung between a 30.5 sen low and 33 sen high.

The offshore marine services provider’s ED Bailey Kho Chung Siang (picture) said the rights issue up to the subscription of redeemable convertible preference shares that can raise RM506 million is slated for completion by the end of October.

“As for the private placement, we are eyeing the last quarter of 2019 (4Q19), so hopefully by the end of December,” he said at the company’s AGM on Tuesday.

Perdana Petroleum is one of the victims of the 2014 global oil price rout, which pushed many companies to the edge of bankruptcy, while thousands of workers were retrenched around the world.

On May 17, it was announced that the private placement is expected to be done by its largest shareholder Dayang Enterprise Holdings Bhd, with the placement of 96.48 million shares to third-party investors, which will potentially raise RM109.99 million on a RM1.14 issue price.

Of the amount, RM75 million will be for the build-up of a sinking fund for the proposed RM682.5 million sukuk issuance.

According to Kho, who is also Dayang corporate affairs head, the new sukuk will be utilised to settle Perdana Petroleum’s debt and Dayang’s current borrowings.

“Currently, we are allowing everyone to digest the news of our rights issue proposal which was announced last Friday.

“Perdana Petroleum is in a corporate debt restructuring and has faced a very poor market for the past three to four years, alongside low charter rates and a low utilisation rate,” he said.

According to him, due to the company’s cashflow, there is a growing challenge for the company to make due for its debts, which is why Dayang is taking over for the debt restructuring.

On the company’s outlook, Kho said the worst is over for Perdana Petroleum. “We are looking positively towards better charter rates and utilisation rate for this year.

“Typically, in our business operations, 1Q19 will always report the lowest numbers, so from there until the year-end, we will improve,” he said.

He added that the company is also looking forward to more contracts throughout the year, such as a recent provision award.

“We will be making necessary announcements about these awards whenever they are available,” he said.

Last week, Perdana Petroleum via its wholly owned subsidiary, Perdana Nautika Sdn Bhd, has received two work order awards for the provision of two units of anchor handling tug and supply vessel from Petronas Carigali Sdn Bhd.

It has also secured a workboat charter job from its largest shareholder worth RM8.5 million, which will be chartered for 180 days with an option period of 150 days.

As of April, the company’s orderbook also stood at RM220 million, while its tenderbook stood at RM240 million.

Perdana Petroleum posted a net loss of RM32.94 million for 1Q19 ended March 31, 2019, against a net loss of RM66.56 million a year ago on seasonal inclement weather, which often occurs early in the year.

Its revenue increased 35% year-on year to RM25.7 million against the previous RM16.78 million, driven by the higher vessel utilisation at 36% compared to 27% in 1Q18.