KUALA LUMPUR (April 10): Mudajaya Group Bhd said today GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems have agreed to pay RM60 million cash to settle outstanding claims relating to the construction of a coal-fired power plant in Tanjung Bin, Johor.

In a filing with Bursa Malaysia today, Mudajaya said after protracted negotiations, its wholly-owned subsidiary Mudajaya Corp Bhd (MCB) has finally reached a settlement with GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems over the outstanding claims.

The power plant is coal-fired with a capacity of 1,000 MW. It was completed and handed over to the client in March last year.

Mudajaya said the settlement will be used towards new and existing projects. It also still retain its rights to any recovery from insurance proceeds that were part of its total claims, via GE as the consortium leader for the project.

"Accordingly, the board of directors is of the opinion that the settlement is in the best commercial interests of the group as it closes the issue for both parties on a relatively positive note and seeks future co-operation on new projects when the opportunities arise," it added.

As a result of this settlement agreement, Mudajaya said it will record a non-cash impairment of assets relating to the project of RM111.9 million in the financial year ended Dec 31, 2016.

In the event there is any future recovery from the insurance claims, a partial reversal of the impairment will be recognised then, it added.

Mudajaya shares closed down 3 sen or 2.61% at RM1.12 today, bringing a market capitalisation of RM603 million.