Monday, 1 May 2017

TH Heavy Engineering woes pile up

Global auditing company Deloitte has highlighted "multiple uncertainties that may cast significant doubt" on the future of the Malaysian oil and gas fabricator TH Heavy Engineering.

At the same time, the Malaysian Securities Commission and Malaysian Stock Exchange have made a series of demands on TH Heavy as part of its Practice Note 17 requirements.

In its disclaimer opinion attached to TH Heavy's latest annual results, Deloitte said it has "not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion".

As at 31 December 2016, the current liabilities of TH Heavy have exceeded its current assets by 733.1 million ringgit ($170 million) as a result of losses incurred during the current and prior financial years, said Deloitte.

The company has no fabrication project which is in progress as at year end.

It has various borrowings which are due within the next 12 months totalling 319.4 million ringgit.

It has been served with various winding-up petitions by creditors, many of whom provided services on the suspended Layang FPSO project.

"As at 31 December 2016, the group did not have any readily available sources of financing to enable the group to complete the conversion work of the said FPSO," added Deloitte. "The inability to deliver the FPSO vessel to the customer might cause a default by virtue of which the customer may claim liquidated ascertained damages."

The customer is Japan's JX Nippon.