KUALA LUMPUR (March 8): Barakah Offshore Petroleum Bhd is seeking upfront approval from shareholders to sell its Kota Laksamana 101 (KL101) barge at a minimum US$11.4 million (RM54.18 million) cash, to a third-party purchaser to be identified later.

The group’s circular to shareholders on Friday (March 8) is asking for a mandate for it to dispose of the barge within a six-month timeframe.

“Barakah has decided to seek an upfront approval from its shareholders for the disposal of the KL101 barge as discussions with potential buyers and the auctioneers have indicated that the proposed disposal should not be conditional upon shareholders’ approval as it may delay the time to deliver the vessel.

“Most potential buyers have indicated that they want prompt delivery of the vessel after inspection as any delays may alter the condition of the vessel from their last inspection,” Barakah said.

Barakah, a Practice Note 17 (PN17) company, originally intends to sell the barge through an auction, and has entered into a commissioning agreement with an auctioneer. But the agreement lapsed in January this year, and the group decided not to renew it to explore other potential offers.

Should the sale materialise, Barakah said the cash proceeds, sans RM850,000 for the disposal's expected expenses, will be used to repay RM52.93 million owed to Export-Import Bank of Malaysia Bhd.

Barakah fell into PN17 in May 2019 after its shareholders' equity fell below 25% of its issued share capital, and less than RM40 million, based on its audited financial results for FY2018. This came after its external auditors expressed a material uncertainty relating to the group's going concern in its audited FY2017 statements.

Shares of Barakah closed unchanged at 3.5 sen on Friday, giving it a market capitalisation of RM35.1 million.

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