This article first appeared in The Edge Financial Daily, on July 27, 2016.

KUALA LUMPUR: TH Heavy Engineering Bhd (THHE) said it is in early talks with the “relevant government agency to secure a contract for the supply of offshore patrol vessels”.

This confirms a report by The Edge weekly on Monday, which stated the company was close to securing a deal worth RM700 million to build at least two vessels for the Malaysian Maritime Enforcement Agency. The job could be a lifeline for THHE, it said.

However, due to the preliminary nature of the talks, the terms of the contract remain to be negotiated and are in a state of flux, said THHE in a bourse filing. It said announcements will be made when the time comes.

THHE was replying to an unusual market activity query from Bursa Securities, after the recent sharp rise in the price and volume of its shares.

THHE said other than the talks, it is unaware of anything else that may account for the trading activities.

On Monday, THHE said it intends to capitalise on the strategic location and resources of its fabrication yard, and will continue to pursue all opportunities related to the upstream oil and gas (O&G) business, as well as to diversify into downstream and other non-O&G businesses, such as marine vessel building and repairs.

Last Friday, THHE shares closed three sen or 35% higher at 11.5 sen, with some 61.1 million shares traded. It gained 4.5 sen or 39% to close at 16 sen on Monday, with 133.2 million shares done. Yesterday, THHE topped the top active list with 72.98 million shares done, but was unchanged at 16 sen, valuing it at RM179.37 million.