Friday 29 Mar 2024
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KUALA LUMPUR (June 21): After Petronas Carigali Sdn Bhd issued a notice last week to Boustead Holdings Bhd's 51%-owned MHS Aviation Bhd to terminate the latter's helicopter service, three other Petronas Carigali joint operating partners followed suit.

The notices this time were from Sapura Exploration and Production (PM) Inc, EQ Petroleum Production Malaysia Ltd, and ExxonMobil Exploration and Production Malaysia Inc.

Just like Petronas Carigali, all three are giving MHS Aviation 90 days’ notice to terminate the contract for the provision of the helicopter service involving the EC225 helicopters, Boustead said in a filing on the stock exchange today. The agreement for the service provision was inked in June 2011.

Boustead said today that Sapura Exploration’s termination letter was received on June 16, while the other two were received on June 19.

Petronas reportedly issued a statement over the weekend saying its move to terminate the helicopter service contract was due to safety concerns. Petronas Carigali is the exploration arm of the oil major.

“The termination is within Petronas Carigali’s contractual rights, following the service suspension of the EC225 since April 2016 due to safety concerns arising from a fatal accident involving the same aircraft model in Norway in the same month of last year,” it was reported as saying in the statement.

After the suspension last April, MHS initiated arbitration proceedings against Petronas in September that year, claiming breach of contract and had sought RM42.7 million in damages. The arbitration is still on-going, Boustead said today.

Furthermore, it said MHS views the three parties' intention to terminate the contract as a breach of agreement by them and will treat any attempt to terminate the said contract on such notices as a repudiatory breach of the contract.

“MHS has sought and obtained legal advice on these terminations. (It) has also put on record that it did not agree that these termination notices have been validly issued,” Boustead said.

Shares in Boustead closed down two sen at RM2.63 per share on 86,500 shares traded today, giving it a market capitalisation of RM5.33 billion.

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