TAS Offshore Berhad (TAS), a Malaysian shipbuilding and ship repair company reported Thursday that its wholly-owned subsidiary TA Ventures (L) Ltd. has received a notice via email April 5 from QMS1 Offshore Services Ltd. for the termination of a shipbuilding contract for an offshore construction vessel.
"TAS's position is that the purported Notice of Termination is not valid and the Company intends to proceed with legal proceedings," the firm said in a filing on stock exchange Bursa Malaysia.
The company said the $11.7 million offshore construction vessel, built by a China contractor, was due for delivery Dec. 11, 2015. TAS indicated that the vessel was "ready for delivery within the agreed time frame but the buyer failed to provide relevant documents and certificates for further process, citing technical and quality issues which we strongly disagree."
The contract cancellation is expected to affect TAS' results for the 2016 financial year although the extent of the impact cannot be ascertained at this point in time as it will depend on the outcome of the legal proceedings against QMS1.
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