TAS Offshore loses another QMS1 shipbuilding contract

Quality product; An offshore support vessel of TAS group.

KUALA LUMPUR: TAS Offshore Bhd’s (TAS) unit TA Ventures (L) Ltd has received another notice to terminate a shipbuilding contract from QMS1 Offshore Services Ltd, bringing the value of axed deals this year to RM151.6mil.

In a filing with Bursa Malaysia, the shipbuilder said the latest contract, valued at US$11.7mil (RM45.8mil), was for the construction of an offshore construction vessel with the delivery date being Dec 11, 2015.

Last month TAS announced QMS1 had sent a notice of termination for contracts relating to the construction of two anchor handling tug oil recovery supply vessels for US$13.5mil (RM52.9mil) each.

TAS said it received the latest purported notice of termination via email on Tuesday.

“TAS’s position is that the purported notice of termination is not valid and the company intends to proceed with legal proceedings,” it said, echoing its position on QMS1’s earlier notice of termination.

TAS said the vessel, built by a China contract builder, was ready for delivery within the agreed time frame. However, it said, the buyer failed to provide the relevant documents and certificates for further process, citing technical and quality issues which TAS disagreed strongly with.

On the expected financial impact on the group, TAS said the purported termination would have an impact on the company’s results for the 2016 financial year.

“The extent of the impact cannot be ascertained at this point in time as it will depend on the outcome of the legal proceedings against QMS1,” it said.