Shares swap will disadvantage BAB minority shareholders. Shares of MISC will be worth 5 times more than BAB (14/3) relative to earnings.

In a nutshell, both sides contribute 7 to 8 FPSO's to the Merged Entity (ME), but MISC will get 70% of it. And they get higher share valuation based on reputation and perception.

Here are the exact RHB notes. Original, in PDF is on the MISC forum of i3investor. Very enlightening.
15 November 2024 Transport | Shipping: MISC
Proposed merger with BAB
With the release of its 3Q24/9M24 results, MISC said it was entering a non-binding MoU with BAB to explore a potential share-based merger of both parties’ offshore businesses. This announcement follows industry speculation on this matter and, if completed, will create a Malaysia-based, sector-focused entity that can leverage the combined talent pool, project development, engineering capabilities, and expertise of both MISC and BAB’s offshore divisions. The proposed merged entity, anticipated to remain listed on the Main Market, would be one of the leading floating production businesses globally, with the scale, resources, and financial strength to compete effectively in the capital-intensive offshore floating production market.
This proposed deal is structured as a merger of MISC’s offshore business with BAB rather
than an outright acquisition, with both parties contributing assets via a share-swap rather than cash, which will be less taxing on cash reserves, in our view. Discussions are currently at the preliminary stages, and specific stake allocations have not been decided yet, as detailed due diligence and valuation assessments will only take place in the next phase of negotiations.
More importantly, management highlighted that the deal will be structured in a way that it will not jeopardise its ability to pay consistent dividends, especially when Mero 3 is expected to deliver stable long-term cash flows upon achieving final acceptance.
MISC’s strategic rationale for the merger is to establish a pure-play, FPSO-focused business with enhanced scale and capabilities. The group would inject its offshore assets into the combined entity, including its portfolio of 13 offshore floating solutions (seven FPSOs, five FSOs, and one semi-FPS). In FY22-23, this segment contributed operating profits of MYR652-666m, bolstered by gains from Mero 3’s construction. Looking ahead, the latter’s maiden charter contributions are expected to further anchor the segment’s performance, in our view.
For BAB, we believe acquiring MISC’s offshore assets through a share swap could
strategically expand its project portfolio and operational footprint, addressing its limited
recent tender wins, which have likely been constrained by financing challenges. This merger could improve the company’s financing access, positioning it to be more active in pursuing new growth opportunities in the FPSO market.
Ultimately, the deal’s pricing will be crucial. MISC's valuation, trading at approximately 14xP/E, significantly exceeds BAB's 4x, which highlights the need for careful consideration in valuing the former’s offshore assets. In addition to the asset valuation, other factors – eg potential synergies and alignment with the long-term strategic goals of both parties – will be important.
Given the likelihood of a share-swap rather than a substantial cash deal, we believe the
prospect of a special dividend is limited.

I noticed that too. According to MIDF, Armada is valued at 3.2 PER, whereas MISC is valued at 15.4 PER. I would rather wait before the merger for the market to eventually price the assets accordingly to a reasonable PER (Price to Earning Ratio). BAB investors may be getting a raw deal with very, very heavily discounted price for their assets.
Greedy Gary cannot be that unintelligent to accept it at face value.

If BAB is buying something in a merger ... or selling something in a take-over, it is still good for us minority shareholders, as for the past 10 years they did NOTHING. I am all in for this deal.
Go go go.

I think that could very well be the case. Issue shares and let investors worry if they are being sold at lower price. Probably we could get more of nominal value at the time of the deal.
Value paid in cash = RM 0.60. Alternatively,
Value given as shares = RM 0.70.

All speculation on my part.

Is fair value RM 0.60, to which discount needs to be applied to facilitate the deal ?

Interestingly enough, when rumours first surfaced BAB reached this exact price of RM 0.60, but only for a few days.

You are welcome. I am now working in a refinery in Iraq (upgrading), so a bit out of touch with upstream where armada acts, but still keeping abreast with the FPSO developments. If only they got their stuff together, there is money to be made.

Gabriel,
CCS is very complex and state of the art. BAB will have to tackle great challenges. There will be cryogenic temperatures (C02 needs to be liquefied for injection). Also, very high pressure are needed, e.g. 300 bar or more. In comparison, FGRS involves tanks, compressor, piping and valves. Nothing unusual.

As per general description of similar
Gases pass through a compressor and then go to a separator to remove any liquids. The gases then leave the separator, are cooled, and go to a drum to remove any condensates before heading back to the plant or facility for reuse.

An interesting project. Based on my knowledge - it has NOTHING to do with carbon capture. It is all about reprocessing gas that goes to flare and using it (for fuel?).

That makes sense. Someone seems to be pushing the price down. Brought it from 0.03 to 0.02. Now, limit (ceiling) is at 0.025, and I cannot buy it all myself at 0.025. At the same time, they are large bids, so buying at 0.02 very difficult.
Problems of low liquidity stocks with a large bid/ask difference.

I sold out my stake a few days ago at 0,705. Wish I waited a bit, but sure the valuation is reach. Would rather take MHC or Tecguan, which have NOT gone up that much yet. And MHC is the parent of Cepat.

Market valuation of MHC seems a bit rich to me. I got some on old orders in line up, and now sold at 0.99. Somehow I feel that pullback is coming. Not easy to be in the CPO business, after all. European environmentalists keep bashing this commodity.
Let us hope I can reenter at 0.95 in bigger way.

You may be right. I remember the oil in the ground was valued at 900 mln RM. Of course, cost of extraction is high (capex), but still, the valuation of the stock market cap is only 50 mln. He should make money. So we do NOT need to worry about PN17 when that is the case. I worry about the guys who will come here and mess with the loyal shareholders, like newbie or me to get us out too soon.

Usually pump and dump con men infest the forum and spread news that exit of PN17 is imminent (eg. because earnings improved). As long as it is peaceful here, we are good to buy and accummulate. No problem that price is down a bit.

This is a standard (boilerplate) anouncement about PN17 extension. I think they allow to extend 2 times without problems. Then they delay approvals, shorten extenstion to 3 months, etc. So far we are good.

I sold off at 97.5. Good luck to longs. May return at 5% discount later on. I do believe that the correction is coming.

I sold off at 70.5. Good luck to longs. May return at 5% discount later on.

The whole carbon capture concept is only intended to take money from taxpayers and increase environmental ratings for better loans. I do not see technical sense in it. After all, carbon stays as carbon and eventually is released through migration via shale or reservoir rock, then cracks.

Droping like a rock on high volume. That clearly is an indication that no deal is about to be finalized.

Downgrade by IB. I guess tired of the BS and no new projects.
Bumi Armada Cut to Hold From Buy by Hong Leong IB >5210.KU

Since they have had no new project for 10 years, they should pay off debts rather than looking for new money. Or do you believe it is normal to borrow for day to day operations ?

People buy PN17 companies where right warrants are used to pay off debt.
This company will use funds to expand facility.
I forgoe thank you letter from bank, prefer profit from expansion.

There was a bonus share issue that diluted and stole 33% of value of a share.

What good is secured financing, even oversubscribed if there are NO NEW PROJECTS going back 10 years. Greedy Gary will be throwing money out of the HO windows as there is no way to burn it through contracts, or any other normal way ?

Yes. I am lining up for Borneo Oil. With crude at 80+ usd that may be the bargain now.

Well, thanks for consistent coverage youngone88, anyway. I guesss we need to use our own judgements. More insights from you sure welcome.

Almost all my stock have recovered from the Japan Carry Trade Dip. One exception is Armada. Greedy Gary has committed to strategy of NO NEW PROJECTS and strong focus on green anouncements, the type of zero carbon or CO2 capture and more ladies in the office. This sure does not work out for shareholders.

The scumbag director that ruined the company is now suing. What a story.
I think that the biggest positive for handal was his departure. Now the fat ass is back as a claimant. Wow.

I checked online for their books. Mathematics for grade 4 was free. I liked it. Impressive pdf with lots of good media. Full answer to exercises. All customized for Malaysia. I think it is called 'localization' in industry.

Any particular reason ? You have been here for a while and I value your opinion, youngyong88.

I checked out this talam transformer Kevin is promoting. Negative earnings as far back as eye can see. Yearly and 3-monthly. Should go back to PN17. We have enough trouble with Sapura.

Nobody interested in this counter ...

In at 68.5 in the morning. I had an old order waiting for a few days. Let us hope for a fast turnaround.

Dive below 40 would be an amazing feat. But no money to buy more.

Also saying you have a secret white knight is nothing. Name and amount should be specified in the PLAN. For all I know the white knight may be a homeless drug user guy he saw at Pudu Jail Area. The homeless guy said he would invest after he wins a lottery, but he does not have a lottery ticket yet, or even money to buy it.

I forgot about the AGM, my mistake. Will find minutes online. Just talking about PN17 does not mean much authorities. If he does NOT have approved REGULARISATION Plan by Bursa that he can demonstrate as carried out, then we are nowhere closer to the PN17 uplift. There can be no milestons achieved as there was no plan with milestones in it.

Maybe Greedy Gary decided to pursue other green energy or carbon zero concepts that nobody has ever done before ?

Written here:
PN17 Progress: Company Turnaround Efforts are underway to turn the company around. The company is on track to exit PN17 next year.

I beg to differ. The company did NOT EVEN form a plan how to address the issue. So they cannot be on tract. There is no destination, pathway or even any goals formally written up.

So, the director is robbing the company and shareholders by means of excessive salary (per above post). Kick out the mean parasite.

Just a comment on today's action as the stock returns to reality. I put transactions in a spreadsheet when BIG SALE occured. I sorted them by size. Turns out there were only 700k orders of 100k or less. 35 million was in big orders of 500k. So it should tell you that there was not much investor buying. Big boys sorted it between themselves.

Time Price Amount
10:53:03 0.035 3,500,000
10:53:03 0.035 2,000,000
10:53:05 0.035 1,783,500
10:53:10 0.035 1,500,000
10:53:09 0.035 1,500,000
10:53:08 0.035 1,500,000
10:53:08 0.035 1,208,000
10:53:06 0.035 1,187,500
10:53:06 0.035 1,050,000
10:53:06 0.035 1,020,000
10:53:08 0.035 1,000,000
10:53:08 0.035 1,000,000
10:53:06 0.035 1,000,000
10:53:06 0.035 515,300
10:53:14 0.035 500,000
10:53:14 0.035 500,000
10:53:12 0.035 500,000
10:53:11 0.035 500,000
10:53:11 0.035 500,000
10:53:11 0.035 500,000
10:53:10 0.035 500,000
10:53:10 0.035 500,000
10:53:10 0.035 500,000
10:53:09 0.035 500,000
10:53:09 0.035 500,000
10:53:09 0.035 500,000
10:53:09 0.035 500,000
10:53:09 0.035 500,000
10:53:08 0.035 500,000
10:53:08 0.035 500,000
10:53:08 0.035 500,000
10:53:08 0.035 500,000
10:53:07 0.035 500,000
10:53:07 0.035 500,000
10:53:07 0.035 500,000
10:53:07 0.035 500,000
10:53:07 0.035 500,000
10:52:59 0.035 500,000
10:52:53 0.035 500,000
10:52:49 0.035 500,000
10:52:44 0.035 500,000
10:52:40 0.035 500,000
10:52:36 0.035 500,000
10:10:34 0.035 500,000
10:53:04 0.035 490,000
10:53:14 0.035 280,200
10:53:05 0.035 250,000
10:21:05 0.035 250,000
10:53:04 0.035 210,000
10:53:06 0.035 140,500
10:53:06 0.035 100,500
10:38:29 0.035 100,000
10:53:05 0.035 83,000
10:53:04 0.035 81,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:12 0.035 50,000
10:53:11 0.035 50,000
10:53:06 0.035 47,500
10:53:09 0.035 29,500
10:53:06 0.035 15,000
10:53:05 0.035 13,500
10:53:05 0.035 13,500
10:29:43 0.035 10,000
10:53:05 0.035 2,000
10:53:06 0.035 200

Yes, Rocky. I was reading the AR and I noticed those items as well. Good performace last year. But not the last 3-months.
As they say, what have you done for me lately ?

I think 2022 ...

I read annual report for 2023. It is very promising. But the company failed to deliver on it. No more record revenues. But these cycles seem normal. 2022 was a weak year.

I have hope for this stock, but not as much as a week ago. Sometimes you like things the more as you study closer. Not this one though.

Yes, I agree. I even bought some last week by mistake as I did not remove order in the line up. But not expecting any miracles. 10x or similar. Just a 'solid' appreciation or return due to cyclicality of the business.

There is always a reason. Good things, like bonus share and split already done and included in price. Not much more catalysts left. One good thing is that nobody is pumping this stock, so the downside, in my opinion, is limited. They will crank those mattresses in the foreseeable future and earn some money.

Cannot tell others what to do. I will sell this stock if it goes up. I do not believe in better sales numbers next reporting period. I think that the education voucher of 100 MYR has already been used by most student, yet the revenues are down. Once it bounces off, I am out.

The damage is done. Stock dropped on Friday 10% at 350% of normal volume. Justification from company seems nonsense. Inflation effect.
Can only hope for better sales in the future.

No assumptions. Just facts from the Regularisation Plan. Just read it, then dispute. Link is on bursa site. Look for section 5.1, page 11, top paragraph. Here is the extract about the price (AFTER consolidation 10:1):
'Entitled Shareholders on an entitlement date to be determined for the Proposed Rights Issue with Warrants (“Rights Issue Entitlement Date”) at an issue price of RM0.12 per Rights Share and 1 Rights Warrant for every 4 Rights Shares subscribed.'

So, price is RM0.12/10 = RM0.012 sen. 10 is the factor of consolidation.