Perdana Petroleum’s unit has no right to cancel vessel purchase, says NCIL

  • Corporate News
  • Wednesday, 07 Dec 2016

Petra Perdana Bhd's work and accomodation barge, Petra Challenger.

KUALA LUMPUR: Nam Cheong International Ltd (NCIL) has objected to the move by Perdana Petroleum Bhd’s unit Petra Offshore Ltd to cancel a US$42mil (RM185.6mil) purchase of a 500-man accommodation work barge.

The offshore marine service provider told Bursa Malaysia that Petra Offshore had on Monday received a letter from NCIL stating that it had no right to cancel the memorandum of agreement (MoA) signed with NCIL in June 2014 and therefore had breached the MoA’s terms.

NCIL has consequently treated the agreement as terminated, with the US$8.4mil (RM37.1mil) deposit paid by Petra Offshore being forfeited.

Petra Offshore had sought for the immediate return of the deposit paid, as advised by the legal counsel.

The Perdana Petroleum group, however, had written-off RM36.1mil, being the 20% deposit for the vessel identified as SK316, in the financial statement for the year ended Dec 31, 2015.

Perdana Petroleum said it would be seeking legal advice on the matter.

In an announcement in March, the company said the termination was necessary as to-date there had been no potential charter contract identified for the vessel.

“The board is of the view that by accepting the delivery of the vessel SK316, the Perdana Petroleum group will have to incur additional operating costs and finance costs for servicing the loan, thereby putting unnecessary strain on the group’s balance sheet and cash flows especially if the new vessel, SK316, remains idle for a prolonged period,” it said.
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