KUALA LUMPUR (June 27): Oil tankers and port marine services provider EA Technique (M) Bhd is initiating arbitration proceedings against Petronas Carigali Sdn Bhd’s wholly owned unit Vestigo Petroleum Sdn Bhd (VPSB), with claims including special and general damages, costs and interest.
The arbitration is related to a dispute arising out of a contract for the lease of the FSU Nautica Muar vessel dated April 11, 2017, according to a Bursa Malaysia filing from EA Technique on Tuesday (June 27).
The Practice Note 17 (PN17) company has appointed Messrs Mohanadass Partnership to represent and assist the group in the proceedings.
“The arbitration proceedings are not expected to have any potential business or operational impact on the company. At this juncture, the company is unable to determine reliably the financial impact of the arbitration proceedings as this is subject to any counterclaim that may be raised by VPSB in the course of the arbitration proceedings,” the filing read.
In a separate announcement, EA Technique also announced the disposal of Nautica Muar for US$6.045 million, or RM27.89 million, to Portland Vessels Ltd, a British Virgin Islands (BVI) incorporated company wholly owned by another BVI entity called Columbia Seas Ltd, which in turn is owned by Ferdous Rahman.
EA Technique said the 31-year-old vessel is currently idle, and its audited net book value as at end-2022 stood at RM19.89 million, with the group’s original cost of investment amounted to RM53.86 million.
The group also proposed to dispose of another floating storage offloading vessel called Nautica Tembikai for at least US$6.05 million, or RM27.92 million, hoping to find a suitor to enter a memorandum of agreement within six months once it gets shareholders’ approval.
EA Technique said the 28-year-old vessel is currently deployed in the South China Sea off the coast of Kuala Terengganu for the fulfilment of a contract servicing the operator of the Tembikai marginal oil and gas field.
The contract will expire in August this year, and EA Technique is in negotiations for an extension.
“However, in the event the contract is not extended, the company intends to proceed with discussions with brokers for the proposed Nautica Tembikai disposal to source for potential purchasers for Nautica Tembikai,” it said.
Nautica Tembikai’s audited net book value as at end-2022 stood at RM22.74 million, versus a cost of investment amounted to RM143.90 million.
Both disposals are expected to yield a gain of at least RM6.90 million if they materialise, while allowing the group to streamline its fleet of vessels and realise the value of a non-profit generating asset like Nautica Muar.
In addition, EA Technique said the proceeds raised will allow it to fund the repayment to scheme creditors, repayment of bank borrowings and working capital purposes.
Thinkat Advisory Sdn Bhd has been appointed as adviser to both proposed disposals.
Selling Nautical Muar forms part of the group asset disposal programme under the group’s scheme of arrangement scheme creditors.
Apart from Nautica Muar, EA Technique earmarked four other vessels to be disposed of under the scheme of arrangement, namely Nautica Batu Pahat, Nautica Renggam, Nautica Kota Tinggi, and Nautica Maharani.
The group has completed the disposal of these vessels, raising gross proceeds of about RM76.53 million, of which approximately RM16.54 million has been set aside for repayment to scheme creditors.