A. INTRODUCTION

Bumi Armada Berhad ("Bumi Armada" or the "Company") wishes to announce that its wholly-owned subsidiaries, Bumi Armada 98/2 Holdings Pte. Ltd. ("BA98/2") and Armada Floating Gas Storage Malta Ltd. ("AFGSM"), have received financing commitments with respect to an aggregate principal of up to USD75 million from Mezzanine Equities N.V. ("MENV"), a wholly-owned subsidiary of Usaha Tegas Sdn. Bhd. ("UTSB"), comprising:

(a) an up to USD30 million (RM128 million) 3-year term loan facility made available by MENV to BA98/2 pursuant to a Facility Agreement between MENV and BA98/2 ("BA98/2 Facility"); and

(b) an up to USD45 million (RM189 million) 6-year term loan facility commitment to AFGSM pursuant to a Letter of Offer from MENV ("AFGSM Facility").

B. BA98/2 FACILITY

1. Information on BA98/2

BA98/2 is a company incorporated in Singapore and its principal activities are investment holding and management consulting (including engineering and corporate services).

2. Information on the BA98/2 Facility

2.1 The purpose of the BA98/2 Facility is to fund Bumi Armada’s 30% equity interest in a joint-venture project with Shapoorji Pallonji Oil & Gas Pte. Ltd. ("SPOG"), in connection with the charter and operation of a floating production storage and offloading facility ("FPSO") for deployment at NELP Block KG – DWN 98/2 Development Project Cluster-II field located on the east coast of Kakinada, offshore India ("Project").

2.2 Security for the BA98/2 Facility is based on Bumi Armada’s 30% interest in the Project ("Security"). Enforcement of the Security will be subject to compliance with the relevant regulatory requirements (in particular those applicable to related party transactions), including the approval of Bumi Armada shareholders (if required at the time), and/or other relevant consents being obtained.

2.3 In addition, MENV has been granted options to acquire Bumi Armada’s 30% interest in the Project at fair market value as determined by an independent valuer ("Options").  The Options may be exercised by MENV at any time within 36 months from the date of grant or until the BA98/2 Facility has been fully repaid, whichever is longer.

Any acquisition of interest arising from an exercise of the Options is on the basis that Bumi Armada will comply with the relevant regulatory requirements (in particular those applicable to related party transactions). As such, the exercise of the Options is subject to the approvals of Bumi Armada shareholders (if required at the time) and/or other relevant consents being obtained. The process for the exercise of the Options is no different than the process for an acquisition of shares by another related party in that the latter would also be subject to the approvals of Bumi Armada shareholders (if required at the time) and/or other relevant consents being obtained.

Bumi Armada may sell its interest in the Project to any third party during the Option period, subject to obtaining MENV’s consent (in addition to any other consent required under applicable law or contractual requirement), and MENV is required to act reasonably in considering whether to provide such consent.

All proceeds arising from a valid exercise of the Options must be applied towards repayment of the BA98/2 Facility.

C. AFGSM FACILITY

1. Information on AFGSM

AFGSM is a company incorporated in Malta and its principal activities are 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 remaining charter period of 16 years) with ElectroGas Malta Ltd. The Malta FSU has been operating since 2017.

2. Information on the AFGSM Facility

The AFGSM Facility is intended for the refinancing of AFGSM’s existing USD45 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.

D. EFFECTS OF THE FACILITIES

Issued and Paid-up Share Capital and Substantial Shareholding

The Facilities will not have any effect on the issued and paid-up share capital of Bumi Armada or the substantial shareholders’ shareholdings in Bumi Armada.

Earnings

The Facilities are not expected to have any material effect on the earnings of Bumi Armada for the financial year ending 31 December 2019.

Net Assets and Gearing

The Facilities are not expected to have any material effect on the net assets and gearing of the Bumi Armada Group based on its latest audited consolidated balance sheet as at 31 December 2018.

E. DIRECTORS AND MAJOR SHAREHOLDER’S INTERESTS

Save as disclosed below, none of the Directors and/or Major Shareholders of the Company or persons connected with them have any interest, direct or indirect in the Facilities.

MENV is wholly-owned subsidiary of UTSB, which is an indirect major shareholder of the Company via Objektif Bersatu Sdn Bhd (“OBSB”). OBSB is a major shareholder of Bumi Armada with 34.9% shareholding as at 30 August 2019. MENV is a related party to Bumi Armada as MENV is a subsidiary of UTSB, a major shareholder of Bumi Armada.

Mr. Chan Chee Beng and Ms. Maureen Toh Siew Guat are Non-Independent Non-Executive Directors of Bumi Armada and nominees of UTSB. In addition, Ms. Toh is also a director of UTSB.

Mr. Chan Chee Beng and Ms. Maureen Toh Siew Guat have abstained from deliberations and voting on matters relating to the Facilities at the relevant Board and committee meetings of Company.

F. AUDIT COMMITTEE’S STATEMENT

Our Audit Committee, after having considered all aspects of the Facilities including its rationale, is of the opinion that the Facilities are (a) in the best interests of Bumi Armada, (b) fair, reasonable and on commercial terms, and (c) not detrimental to the interests of Bumi Armada’s minority shareholders.

G. DIRECTORS’ RECOMMENDATION

The Board of Directors of Bumi Armada is of the opinion that the Facilities are in the best interests of the Company.

This announcement is dated 26 September 2019.