KUALA LUMPUR: TAS Offshore Bhd’s shares fell 4.8% in early trade Wednesday following the termination of contracts with two shipbuilders in China to build 16 offshore support vessels (OSVs).
The counter shed 4.88%, or one sen to 19.5 sen. It is currently trading at a PE ratio of 9.02 times.
TAS Offshore is expected to lose RM70mil for cancelling two contracts with two shipbuilders in China to build 16 units of OSVs.
TAS Offshore said its wholly-owned subsidiary TA Ventures (L) Ltd earlier entered into the shipbuilding contracts with Guangzhou Hangtong Shipbuilding and Shipping Co Ltd as well as Jiangmen Hangtong Shipbuilding Co Ltd for the 16 vessels.
However, TA Ventures subsequently signed the supplementary agreements and addendums with the shipbuilders to postpone the delivery dates and suspend the shipbuilding progress due to low oil prices and subdued demand for OSVs.
The contract sum for each vessel ranged from US$10.38mil (RM44.24mil) to US$39.38mil per vessel, depending on the size and specification of the vessel.
The shipbuilding contracts were executed during 2013 to 2015, with the OSVs scheduled to be delivered between 2014 and 2017.