SCIB terminates six EPCC contracts in Qatar and Oman to mitigate long-overdue debts risk

Friday 19 Apr 2024

KUALA LUMPUR (Nov 10): Sarawak Consolidated Industries Bhd (SCIB), which missed its Oct 31 deadline to issue its annual report for the financial year ended June 30, 2021 (FY21), said on Wednesday (Nov 10) it had terminated six engineering, procurement, construction and commissioning (EPCC) contracts in Qatar and Oman to mitigate risks arising from long-overdue debts owed by its clients.

SCIB said in a bourse filing it had signed the respective settlement agreements with Pavilion Qatar Engineering Co W.L.L, Revenue International LLC, Interceptor Trading & Contracting W.L.L and Skyview Trading & Contracting W.L.L in the two countries to mutually terminate the contracts previously awarded to SCIB and its wholly-owned subsidiary company SCIB International (Labuan) Ltd between Oct 25, 2019 and Dec 3, 2020.

These contracts include jobs related to constructing villas, buildings and service centres, and civil works for a fire water project in Qatar and Oman.

“The company is enforcing its rights under the contracts and taking the necessary measures to protect SCIB’s interests in mitigating the risks arising from the long-overdue debts owing by the clients and the uncertainties surrounding the Covid-19 pandemic.

“Additionally, this decision was made as a result of repositioning of business strategy in overseas projects,” said SCIB.

According to SCIB, the total amount owed by the clients stood at US$148.71 million (RM617.22 million), while the total amount owed to the subcontractors stood at US$135.15 million (RM560.94 million).

“The final claims stated in the settlement agreements are consistent with the provisions that were taken up in the accounts. As a result, the termination of contracts will not have any material effect on the gearing, earnings per share and net assets of SCIB for FY22,” said SCIB.

Trading of the shares in SCIB has been suspended since Tuesday after the group failed to submit its annual report.

SCIB said on Tuesday that the company’s operations will continue as usual despite the trading suspension.

It also said it is working with its external auditor to expedite the finalisation of the audit of the financial statements and it is targeting for the annual report to be issued by December.

Prior to the trading suspension, the counter rose two sen to settle at 20.5 sen on Monday.

Edited ByLam Jian Wyn

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