KUALA LUMPUR (June 3): EA Technique (M) Bhd is planning to file an application to set aside the payment claim by Malaysia Marine Heavy Engineering Sdn Bhd (MMHE) in relation to a dispute concerning a contract to convert a vessel into a floating storage and offloading (FSO) facility.

“The principal amount has been provided for in the accounts, whereas the interest portion shall be included in the accounts once the company receives judgement of the above application,” said EA Technique, in a filing with Bursa Malaysia this evening.

Thus, EA Technique said the adjudication decision is expected to have a financial impact of approximately RM11.87 million (the interest portion) to the company by reducing its future profit and cash flow position.

To recap, on Oct 8 last year, EA Technique had counterclaimed MMHE’s claim, with the former seeking US$21.74 million (RM90 million) over a dispute concerning a contract to convert a vessel into a floating storage and offloading (FSO) facility.

EA Technique's claims against MMHE include the recovery of overpayment of US$8.73 million in respect of the price of the conversion contract, a US$4.01 million claim on the back charges under the contract, and the recovery of US$9 million paid to MMHE pursuant to the letter of undertaking due to unsubstantiated change orders.

On May 27, 2019, the adjudication decision was that EA Technique was to pay the sum to MMHE by June 28, 2019.

EA Technique dropped 1.5 sen or 3.33% to 43.5 sen, giving it a market capitalisation of RM219.24 million.

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https://www.theedgemarkets.com/article/mhb-rigorously-defend-us217m-claims-ea-technique