MARC has placed its A+ rating on Petra Perdana Berhad’s (Petra Perdana) RM800 million Dual Currency Revolving Facility on MARCWatch Negative.

The rating action is triggered by the group’s poor financial performance in the six months ended June 30, 2010 (1H2010). During the period, Petra Perdana recorded a loss before tax of RM30.7 million due to falling charter rates, lower capacity utilisation and decrease in contribution from its integrated brownfield services division. Due to its inability to secure adequate contracts, six of its 23 offshore support vessels are currently in lay-up and are awaiting disposal.

The group’s cash balances as at June 30, 2010 has declined to RM32.9 million (December 2009: RM179.7 million) due to negative net cashflow from operating activities of RM63.9 million and net repayment of its other borrowings amounting to RM101.6 million during the period. Its short-term liquidity is supported by its recently completed private placement and rights issue exercises which has raised a total of RM111.7 million. However, MARC opines that Petra Perdana’s credit metrics is no longer consistent with its current rating level, due to its significantly weaker cash generation ability, relative to its fairly high ongoing debt servicing requirements. The group’s leverage remains elevated as at June 30, 2010 as measured by its adjusted debt-to-equity including operating lease commitments of 2.28 times.

MARC is in the process of completing its review on Petra Perdana and expects to complete the review over the next four to five weeks.

Petra Perdana is an offshore marine services provider which currently operates a fleet of 23 offshore support vessels and has a 29.6% stake in public-listed Petra Energy Berhad.

Contacts:
Eric Chua 03-2082 2245 / cheekiong@marc.com.my,
Ahmad Rizal Farid 03-2082 2253 / arizal@marc.com.my,
Anandakumar Jegarasasingam 03-2082 2250 / kumar@marc.com.my