KUALA LUMPUR (Oct 12): Icon Offshore Bhd said its joint venture (JV) with FOB Swath Malaysia AS has terminated a contract with Danish Yachts AS to build a fast crew boat due to the latter's failure to construct the vessel in accordance with the technical specification.
In a statement today, Icon Offshore said Icon-FOB Holdings (L) Inc, in which Icon Offshore holds a 51% stake while FOB Swath Malaysia owns 49%, and Danish Yachts had on Oct 6 signed a letter of agreement for the contract termination.
"Both (Icon-FOB Holdings) and Danish Yachts have agreed to mutually terminate the contract and make full refund of the payment made to date," it added.
"Compliance to technical specification is a key factor before a vessel is accepted for delivery. Generally, a vessel goes through stringent harbour acceptance tests and sea acceptance tests before a buyer or owner can accept the constructed vessel by any shipyard," Icon Offshore deputy chief executive officer Captain Hassan Ali said.
"We will not accept any vessel that does not meet the contractual technical specifications. We currently have four other vessels under our shipbuilding programme. We have and shall continue to rigorously review the progress of the shipbuilding contract, especially technical specification compliance," he added.
The amount to be reimbursed by Danish Yachts totals DKK21.35 million (RM13.66 million) inclusive of interest.
"The termination of the shipbuilding contract is not expected to have any impact on Icon Offshore's gearings, earnings, net assets, share capital and shareholding structure of Icon Offshore," said the group.
Shares in Icon Offshore closed unchanged at 38 sen today, for a market capitalisation of RM447.3 million.
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