KUALA LUMPUR: Maybank Investment Bank Research has downgraded Velesto
to sell from buy and cut its target price to 11 sen or by 63% from 16 sen as it cut the earnings outlook due to the operational setback on its Naga 7 rig.
The research house said on Tuesday it had cut the FY21-23 earnings by 58%-144% and there was a change in view to reflect the uncertainty over the rig’s long-term availability at this juncture.
Based on various sources gathered, an unfortunate incident happened to Velesto’s Naga 7 rig during operations. One of its legs “punched through” during first preloading, which resulted in the rig tilting around 10 degrees.
That said, the rescue operation on Naga 7, led by Perdana Marathon and Armada Tuah vessels was a success, with zero casualty reported. All the 101 crew members onboard Naga 7 are safe and have been transferred onshore.
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