KUALA LUMPUR (July 26): TH Heavy Engineering Bhd (THHE) said it is in preliminary discussions to secure an offshore patrol vessels supply contract, following a report by The Edge Weekly on Monday.
In a bourse filing, 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 business, and also diversify into downstream and other non-oil and gas businesses.
It said this includes marine vessel building and repairs.
“In this respect, the Company states that it is in preliminary discussions with the relevant government agency to secure a contract for the supply of offshore patrol vessels.
“However, at present moment due to the preliminary nature of these discussions, the terms of the contract remains to be negotiated and is in a state of flux and therefore, the Company will be making appropriate announcements (if any) when the time materialises,” said the group.
On Monday, the group was issued an unusual market activity (UMA) query by Bursa Malaysia on the spike in its share price and trading volume, with the counter closing 4.5 sen or 39% higher at 16 sen, amid some 133.2 million trades.
In a response to the UMA today, the group said it is unaware of any other possible explanation for the trading activity, while highlighting the recent coverage by The Edge Weekly.
“Save for ongoing and preliminary discussions between the Company and the relevant government agency referred in our earlier announcement with regard to an article published by The Edge on 25 July, 2016, we are not aware of any other material corporate development relating to the company and its subsidiaries’ business and affairs that has not been previously announced that may account for the trading activity, including those in the stage of negotiation/discussion,” it said.
The Edge Weekly reported that THHE is understood to be close to securing a contract, valued in excess of RM700 million, to build at least two boats for the Malaysian Maritime Enforcement Agency.
The contract, which has been negotiated for some time, could be a life-line for THHE, according to the report.
At 12.30 p.m. today, THHE was the top actively-traded stock on the exchange, with some 58.5 million shares done. The counter gained 0.5 sen or 3.12% to 16.5 sen, bringing its market capitalisation to RM179.37 million.