Mermaid Maritime (DU4.SG) down 7.1% at 2-week low of $0.52 in active trade as oil drilling firm books US$7.4 million ($10.2 million) loss from sale of its KM-1 tender rig project to Malaysia’s Kencana Petroleum (5122.KU) for US$66.6 million, says Dow Jones.

Company disposing rig (ordered in 2007 but still under construction) in bid to cut losses, citing delay in construction, cost overruns.

“With the exit from KM-1, which was seen as a major earnings driver for the company, we believe management would need to start on a clean slate to map out ways of utilising its cash hoard for asset acquisitions, to review what went wrong, and to assess how it could improve business operations and subsea utilisation rates,” says CIMB, which has Underperform call, cuts target to $0.36 from $0.49 after lowering FY11-12 EPS estimates by 24%-26% to erase KM-1 contributions.

Orderbook quotes suggest stock may hold above $0.495.