MISC unit wins RM1.13b in adjudication against Sabah Shell

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KUALA LUMPUR (Feb 14): MISC Bhd's wholly-owned unit Gumusut-Kakap Semi-Floating Production System (L) Ltd (GKL) has been awarded US$254.45 million (RM1.13 billion), after it obtained an adjudication decision in its favour in its case against Sabah Shell Petroleum Co Ltd.

GKL initiated the legal action last September, after it fell into contractual disputes with Sabah Shell over outstanding additional lease rates, payment for completed variation works and other associated costs for the construction of the Gumusut-Kakap Semi-Floating Production System (Semi-FPS), which is for crude oil production.
 
Today, MISC said the sum will be paid as increased day rates pursuant to the terms of the lease agreement dated Nov 9, 2012 that was signed between GKL and Sabah Shell for the construction and lease of the Gumusut-Kakap Semi-FPS.
 
GKL was also awarded applicable interest, and costs of RM308,634.04, said MISC in a Bursa Malaysia filing.
 
“The adjudication decision is binding on GKL and Sabah Shell, pursuant to the Construction Industry Payment and Adjudication Act 2012,” MISC said.

The decision, it added, is expected to have a positive impact on its earnings per share, gearing and net assets per share for the financial year ending Dec 31, 2017 onwards.

Incorporated in 1968, MISC is the shipping arm of national oil company Petroliam Nasional Bhd (Petronas), with a combined fleet capacity of over 12 million dead-weight tonnes.
 
At 2:45pm today, MISC was trading at RM7.590, giving it a market capitalisation of RM33.88 billion.