KUALA LUMPUR, April 25 — Bumi Armada, which had successfully refinance its unsecured term loans of US$380 million and revolving credit facilities of US$280 million into a single facility, emerged as the most actively-traded stock this morning.
After opening flat at 27 sen, the shares eased three sen to 24 sen as at 12.05 pm, with 400.32 million shares changing hands.
According to Bursa Malaysia, the new debt will be split into US$260 million and US$400 million which will be repayable over two and five years.
Affin Hwang Investment Bank Bhd said the refinancing news is a positive development for Bumi Armada as near-term default risks have been uplifted.
“Nevertheless, interest expenses would be seven per cent higher in financial year 2019, as a result of the financing.
“We retain our contrarian view on Bumi Armada as we had earlier expected the refinancing to materialise. We have a 'buy' call and sum-of-the-parts analysis target price (TP) of 28 sen,” it said in a research note today.
Meanwhile, JF Apex Securities Bhd upgraded Bumi Armada to a “buy” call from “hold” previously with a higher TP of 47 sen (from 35 sen previously).
It welcomed the latest development, saying the company has secured a much-needed lifeline to avoid defaulting on its debt.
It also said the refinancing will ease Bumi Armada's cash flow but comes with a higher interest rate cost by RM40 million. — Bernama
