MATERIAL LITIGATION E.A. Technique (M) Berhad Payment Claim dated 29 May 2019 by Malaysia Marine Heavy Engineering Sdn Bhd against E. A. Technique (M) Berhad pursuant to section 5 of the Construction Industry Payment and Adjudication Act 2012

E.A.TECHNIQUE (M) BERHAD

Type Announcement
Subject MATERIAL LITIGATION
Description
E.A. Technique (M) Berhad  Payment Claim dated 29 May 2019 by Malaysia Marine Heavy Engineering Sdn Bhd against E. A. Technique (M) Berhad pursuant to section 5 of the Construction Industry Payment and Adjudication Act 2012

 

  1. INTRODUCTION

 

The Board of Directors of E.A. Technique (M) Berhad (“Company”) wishes to announce that the Company had on 29 May 2019 received a Payment Claim dated 29 May 2019 pursuant to section 5 of the Construction Industry Payment and Adjudication Act 2012 from Malaysia Marine Heavy Engineering Sdn Bhd (“MMHE”) via its solicitors, Messrs. Mohanadass Partnership for a total amount of US$ 6,096,791.91 (“CIPAA Payment Claim”)

 

  1. BACKGROUND INFORMATION

 

On 13 February 2015, the Company entered into an engineering, procurement, construction, installation and commissioning contract (“EPCIC Contract”) with HESS Exploration & Production Malaysia B.V. (“HESS”) for the engineering, procurement, construction, installation and commissioning of a floating storage and offloading facility (the “FSO Facility”) to be deployed in the full field development project in the North Malay Basin, located approximately 150 km North East off the shore of Kota Bharu in the state of Kelantan (the “Project”).

 

Pursuant to a letter of award dated 9.6.2015 (“Letter of Award”) and a contract for “Provision for Demolition, Refurbishment and Conversion of M.T. Nautica Bergading (Ex-Sark) into a Floating, Storage and Offloading (FSO) Facility for Full Field Development (FFD) Project, North Malay Basin (NMB), Contract No. EAT/MMHE/FSO/2014-003” (the “Conversion Contract”) dated 9.6.2015, MMHE was appointed as the subcontractor for the Project.

 

The CIPAA Payment Claim is in relation to disputes over the alleged non-payment of additional works done by MMHE and the invoices purportedly issued by MMHE under the the Conversion Contract.

 

 

  1. The Business, Financial and Operation Impacts of the Adjudication Decision and the steps to be taken

 

The CIPAA Payment Claim is not expected to have any potential business or operational impact on the Company. At this juncture, the Company has not made any provision in the accounts as the Company is seeking advice and consultation from its solicitor to contest the matter. However, the CIPAA Payment Claim is expected to have a financial impact of approximately RM25.48 million to the Company by reducing its future profit and cashflow position.

 

Further announcement will be made in respect of any material development thereof.

 

This announcement is dated 11 June 2019.






Announcement Info

Company Name E.A.TECHNIQUE (M) BERHAD
Stock Name EATECH
Date Announced 11 Jun 2019
Category General Announcement for PLC
Reference Number GA1-07062019-00041