This article first appeared in The Edge Financial Daily, on April 8, 2016.

KUALA LUMPUR: TAS Offshore Bhd plans to initiate legal action against Abu Dhabi-based QMS 1 Offshore Services Ltd (QOSL) after the latter terminated another contract, this time a RM45.74 million shipbuilding contract, bringing the total value of contracts terminated by QOSL to RM151.46 million.

In a bourse filing yesterday, TAS Offshore said its wholly-owned subsidiary TA Ventures (L) Ltd received a notice of termination via email on Tuesday to end the US$11.7 million (RM45.74 million) contract for the construction of one offshore construction vessel.

The termination of the contract is expected to impact TAS Offshore’s financial year 2016 (FY16) results, but the extent of the impact cannot be ascertained at the moment, pending the outcome of the legal proceedings against QOSL, the filing read.

Nevertheless, the termination is not expected to have a major operational impact on the TAS Offshore Group, it added.

“TAS Offshore’s position is that the purported notice of termination is not valid and the company intends to carry on with legal proceedings,” said TAS Offshore.

The vessel, built by a China-based contract builder, was scheduled to be delivered on Dec 11, 2015.

“The vessel was ready for delivery within the agreed time frame, but the buyer failed to provide relevant documents and certificates for further process, citing technical and quality issues which we strongly disagree,” it added.

Last month, TAS Offshore also received a notice from QOSL to terminate its contracts to build two units of anchor handling tug supply vessels for US$13.5 million each.

TAS Offshore shares closed half a sen or 1.18% higher at 43 sen, with a market capitalisation of RM75.51 million.