Triyards Holdings, the offshore marine division of Ezra Holdings, has swung deep into the red following the termination of two shipbuilding contracts worth some $51 million.
"The Board of Directors of Triyards Holdings wishes
to announce that its wholly owned subsidiary, Saigon Offshore Fabrication
and Engineering Limited
, has received notices of termination of the two shipbuilding contracts dated 26 June 2015 and the addendum dated 10 May 2017 for the design and construction of two units of chemical tankers of an aggregate contract value of US$51 million from the purchaser of the chemical tankers," said a statement from the company.
The customer is claiming reimbursements of all sums paid in advance amounting to about US$10.2 million, said the press release.
Triyards said termination of the two contracts was because it was unable to deliver the projects by the contractual delivery dates as it lacked funding to complete the vessels.
The Company has assessed the financial impact of the Termination Notices and the termination of the Contracts which has been announced by the Company and the Board via SGXNET together with its financial results for the financial year ended 31 August 2017.
Meantime, the group says it is in discussions with its existing lenders and customers to obtain requisite financing as such that the projects can be delivered to the client.
"While the group will continue its focus on strengthening its balance sheet, improving the liquidity, streamlining its operation with the aim to achieve positive operating cashflow, it is foreseen that next 12 months will remain extremely challenging for the group," adds Triyards.