This article first appeared in The Edge Malaysia Weekly on April 6, 2026 - April 12, 2026

In the last few years, Bumi Armada Bhd (KL:ARMADA) has been touted as an ideal partner in any corporate mergers and acquisitions.

This is because the company has been consolidating its balance sheet and did not aggressively bid for new projects. Moreover, its major shareholder and founder, the late T Ananda Krishnan, seemed to be keener on technology-related investments.

Ananda Krishnan died on Nov 28, 2024. On Nov 14, Armada had entered into a deal with MISC to merge their offshore businesses but the deal was called off in August 2025.

This left the future of Bumi Armada uncertain — until last week when the group proposed a capital reduction of RM1.95 billion to wipe out accumulated losses at the company level.

The company, which is in the business of providing floating, production, storage and offloading (FPSO) vessels to oil and gas companies, incurred the accumulated losses following impairments to its subsidiaries in 2018. In that year, Bumi Armada took a RM2.24 billion hit to its books.

Since then, Bumi Armada has consolidated its operations and reduced debt. It operates seven FPSOs, one LNG floating storage unit and two subsea construction vessels operating in the Caspian Sea.

The proposed capital reduction exercise will see Bumi Armada’s group retained earnings increase to RM2.4 billion from RM263 million currently.

Following the completion of the exercise, the group, which is 34.6% controlled by the estate of the late Ananda Krishnan, has better options to undertake share buybacks and declare higher dividends.

In the last few years, Bumi Armada has disposed of its offshore support vessels and reduced debt. The company had borrowings of RM3.7 billion and net cash flow from operations of RM1 billion as at end-2025. Its gearing of 0.6 times reflects a much leaner balance sheet than most of its competitors.

Hopefully, the latest proposal will mark a new phase for Bumi Armada with the management taking a more proactive role to give better returns to shareholders.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.