Malaysian shipyard TH Heavy Engineering (THHE) has been served with three winding-up petitions over an alleged debt of around $9.52million in total, for the supply of equipment and work done on the Layang floating, production, storage and offloading (FPSO) vessel.
THHE said that the first petition was placed by MIB Italiana on Monday for a sum of around $1.3 million for the supply and installment of quick release hook & mooring hawser for the FPSO.
The second petition was also placed on Monday by Orwell Offshore for a sum of around $7.6 million in relation to the supply of equipment and machinery for the Layang.
However, it had said that it was seeking legal advice on the matters with a view of defeating the petitions, adding that the winding-up petitions would not have any additional financial or operational impact on the company other than the amounts claimed.
“THHE’s current cash flows are unable to service debt. We believe that the company, which suffered a loss of RM33mil in the first quarter of financial year 2016 (1QFY16) in addition to losses of RM45mil in FY15 and RM76mil in FY14, will have difficulty in securing external financing for its working capital and ongoing projects unless it is able to recapitalise its balance sheet via an equity raising exercise,” AmInvestment Bank Research said in a report.
THHE is currently converting the Laurita, a partly-converted floating production, storage and offloading (FPSO) vessel, into the Deep Producer 1 FPSO which will then be leased to JX Nippon Oil & Gas of Japan for deployment at the Layang oil and gas field off Sarawak for an initial seven years with an additional 10 one-year extensions.