Malaysia’s top shipping line, MISC, has moved to combine its offshore business with fellow floating production storage and offloading (FPSO) vessel specialist Bumi Armada.
The two companies have entered into a non-binding memorandum of understanding to explore a prospective share-based merger, following market talk of a potential tie-up earlier this year.
“The proposed merger will establish a Malaysian-based sector-focused entity which leverages the combined talent pool, project development and engineering capability, and know-how of both MISC’s offshore business and Bumi Armada,” the companies said in separate filings with Bursa Malaysia, adding that the merged entity would be among the leading floating production businesses globally with the scale, resources and financial capacity to compete in the growing and capital intensive offshore floating production segment.
Bumi Armada, whose largest shareholder is Malaysian tycoon Ananda Krishnan, counts three owned and four jointly owned FPSOs, one LNG FSU, and two offshore construction vessels. The company also has a CO2 shipping and injection solutions joint venture with handysize gas carrier owner and operator Navigator called Bluestreak CO2. Meanwhile, MISC, which is controlled by the Malaysian state energy firm Petronas via a 51% stake, has seven FPSOs, five FSOs, and the first and largest semi-submersible floating production system in Asia, the Gumusut Kakap, as part of its offshore assets.
The merger is at an “early stage of evaluation and there is no certainty that the ongoing discussions will lead to an agreement,” the companies, which will have nine months to close the deal, added. The merged entity is expected to remain listed on Bursa Malaysia.
