Major shareholder lends $75M to Bumi Armada

Bumi Armada has received financing commitments of up to $75 million from a major shareholder to fund its offshore projects in India and Malta.

FPSO Armada Sterling II – one of the FPSO previously provided by Bumi & SPBAG JV to ONGC. Source: Shapoorji Pallonji Oil & Gas
FPSO Armada Sterling II – one of the FPSO previously provided by Bumi & SPBAG JV to ONGC. Source: Shapoorji Pallonji Oil & Gas

The Malaysian FPSO specialist said the funding would be provided by Mezzanine Equities, a subsidiary of Usaha Tegas, a major Shareholder in Bumi Armada.

Bumi Armada said that an up to $30 million loan would be used to fund its 30% equity interest in a joint-venture project with Shapoorji Pallonji Oil & Gas Pte. Ltd. (“SPOG”).

The financing is related to the joint venture’s contract for the charter and operation of an FPSO for deployment at ONGC’s NELP Block KG – DWN 98/2 Development Project Cluster-II field located on the east coast of Kakinada, offshore India. The FPSO contract, announced in May, is for a fixed period of nine years, valued at approximately $2.1 billion.  

Under the terms of the loan granted to Bumi Armada, Mezzanine Equities will have the option to acquire Bumi Armada’s 30% interest in the project at fair market value as determined by an independent evaluator.

Furthermore, Bumi Armada said that up to $45 million loan would be directed to its AFGSM business in Malta.

AFGSM is a company incorporated in Malta with its principal activities being ship owning, chartering and provisioning of marine support and other services to offshore oil and gas companies.

AFGSM owns a floating storage unit (“Malta FSU”) which is currently servicing a long term charter contract with ElectroGas Malta Ltd. The Malta FSU has been operating since 2017, and has a remaining charter period of 16 years.

Bumi said that the AFGSM loan is intended for the refinancing of AFGSM’s existing $45 million bridge loan facility for the Malta FSU and is expected to require security over certain project assets, including a mortgage over the Malta FSU and an assignment over AFGSM’s rights under the Malta FSU charter contract.

“A further announcement will be made upon AFGSM and MENV concluding the definitive financing and security documents for the AFGSM Facility,” Bumi Armada said.

Offshore Energy Today Staff

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