MARC has lifted the MARCWatch Developing placed on Bayu Padu Sdn Bhd’s (“Bayu Padu”) A+ID/MARC-1ID rated RM500 million Istisna’ Bonds and RM100 million Murabahah Commercial Papers/Medium-Term Notes (“MCP/MMTN”).

Bayu Padu is a wholly-owned special purpose vehicle of SapuraCrest Petroleum Berhad (“SapuraCrest”) incorporated to facilitate the issuance of the Istisna’ Bonds and MCP/MMTN, the proceeds of which are intended for utilization by the SapuraCrest Group of companies.

The lifting of the MARCWatch is due to improved financial performance by SapuraCrest during the first quarter of its FYE January 2008 (i.e. for the three months ended 30 April 2007), coupled with better demand prospects for the company’s core activities.

Bayu Padu was initially placed on MARCWatch Developing in December 2006 as a result of concerns arising from the poor performance of SapuraCrest’s Installation of Pipelines and Facilities (“IPF”) unit during the nine-month period up to October 2006 and the lack of visibility in near to immediate term revenue.

The MARCWatch was extended further in March 2007 due to continued uncertainty in the demand for SapuraCrest’s IPF services, and the significant decline in pre-tax profit for financial year ended (“FYE”) January 2007. SapuraCrest recorded revenue of RM1.766 billion (FY2006: RM1.794 billion) and pre-tax profit of RM41.2 million (FY2006: RM109.6 million). After tax loss attributable to equity holders totaled RM17.7 million.

The financial performance of SapuraCrest during the first quarter of its FYE January 2008 has improved, with revenue increasing to RM473.7 million from RM380.2 million during the same period a year ago. Pre-tax profit, meanwhile, increased to RM23.5 million from RM16.3 million a year ago, while after-tax profit increased to RM21.6 million from RM14.4 million during the same period.