KUALA LUMPUR (March 3): Barakah Offshore Petroleum Bhd (KL:BARAKAH) is seeking a new buyer for its Kota Laksamana 101 (KL101) barge as it has cancelled its plan to sell the vessel to PT Wintermar Rajawali Asia after the preliminary agreement they inked for the deal lapsed on Feb 28.

In a bourse filing, Barakah, which is under Practice Note 17 (PN17), said it has sent a notice of cancellation and termination to PT Wintermar Rajawali on Monday. "Accordingly, the MOA has become null with immediate effect," Barakah said.

Barakah said it is already in active talks with several other potential buyers to finalise the disposal of the KL101 barge, while simultaneously negotiating revised payment terms with the Export-Import Bank of Malaysia Bhd (Exim Bank) for its outstanding debt.

Barakah had intended for the disposal of the barge to partially repay the US$11.06 million (about RM49.4 million) it owed Exim Bank.

It had inked a memorandum of agreement on Oct 28, 2024, with PT Wintermar Rajawali, an Indonesian offshore shipping company, to sell the KL101 barge for US$9.7 million (approximately RM41.81 million), though the price that was agreed upon was lower than the minimum disposal consideration of US$11.4 million that was approved by Barakah's shareholders on March 25, 2024.

Barakah has been under PN17 status since March 2019, after defaulting on payments to Exim Bank for the KL101 barge. The vessel's disposal is part of the group's cost-cutting initiatives to improve its financial position, as maintaining the idle barge incurs annual expenses of about RM2.09 million for maintenance and RM3.52 million for depreciation.

The barge, a pipe-laying vessel, has been idle since September 2019.

Despite this setback, Barakah remains focused on exiting its PN17 status. In a monthly update filed to Bursa Malaysia on Monday, Barakah said it is still developing a plan to regularise its PN17 condition and that it has secured a six-month extension till May 14 this year from Bursa to submit the plan for regulatory approval.

As of its financial year ended June 30, 2024 (FY2024), Barakah had cash and bank balances of RM16.01 million, with short-term borrowings of RM52.05 million. It reported accumulated losses of RM133.76 million and a negative operating cash flow of RM13.36 million.

Shares in Barakah ended unchanged at four sen on Monday, giving the company a market capitalisation of RM40.12 million.