He noted that the de-merger exercise between UMW-OG and parent UMW Holdings earlier this year, actually enabled the company to carry out a more structured debt restructuring exercise.
“After the de-merger, we will have more support in terms of finance with the MYR1.8bn ($418.8m) rights issue, of which MYR1.3bn will be used to reduce debt and MYR300m for working capital.
“With that, our gearing ratio will go down from 1.81 to 0.56, which is significant, and our total debt will reduce from MYR4.1bn to MYR2.3bn.
“This will reduce our annual interest rate and free up cash to enable us to be more efficient when we are negotiating with vendors for early payment,” he said.
Rohaizad said at 0.56 gearing, the company could operate at optimum levels and the company is currently working on restructuring its debts.
Going forward, there are also plans to return to Myanmar, Indonesia, Thailand and Vietnam.
“It is important for us to return to these countries and ensure that we don’t lose the market we have developed.
“Looking at the cyclical nature of the business, we need to ensure that we have a wider market, potentially in the Middle East, so that we can spread the competition between rigs and where chances of getting jobs are better,” said Rohaizad.
He said rig utilisation was important and continuously looking for new jobs was a must for the company.
“With 59 rigs in Asia not in operation, it is difficult to see the day rate increasing in the near future, although it has somewhat stabilised.
“The fewer the rigs that are operational, the higher the day rate.”
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