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OTHERS MUDAJAYA GROUP BERHAD ("MUDAJAYA") Settlement Agreement between Mudajaya Corporation Berhad with GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems

MUDAJAYA GROUP BERHAD

Type Announcement
Subject OTHERS
Description
MUDAJAYA GROUP BERHAD ("MUDAJAYA")
Settlement Agreement between Mudajaya Corporation Berhad with GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems

The Board of Directors of Mudajaya is pleased to announce that after protracted negotiations, Mudajaya Corporation Berhad (“MCB”), a wholly-owned subsidiary of Mudajaya has on 10 April 2017, reached a settlement ("the Settlement") with GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems (collectively referred to as “GE”) in respect of outstanding claims relating to the construction of a 1 x 1000 MW net coal fired power plant located at Tanjung Bin, Mukim Serkat, Johor Darul Takzim, Malaysia (“the Project”). The Project was completed and handed over to the client in March 2016.

The Settlement will provide the Group with cash of RM60.0 million that it can deploy towards new and existing projects, and still retain its rights to any recovery from insurance proceeds that were part of its total claims, via GE as the consortium leader for the Project. Accordingly, the Board of Directors is of the opinion that the Settlement is in the best commercial interests of the Group as it closes the issue for both parties on a relatively positive note and seeks future co-operation on new projects when the opportunities arise.

The terms of the Settlement are set out in a Settlement Agreement dated 10 April 2017 between MCB and GE whereby it was agreed that MCB’s claims against GE and GE’s counterclaims against MCB in relation to the Project would be resolved based on, amongst others, the following terms:-

a)   GE will pay MCB RM60.0 million as full and final settlement of MCB’s claims against GE;

 

b)   Each party shall be entitled to any insurance proceeds recovered in relation to their respective insurance claims; and

 

c)   Each party releases and discharges all claims, rights, demands and set-offs that it may have against any other party arising out of or in connection with the claims.

As a result of the Settlement Agreement, the Group will record a non-cash impairment of assets relating to the Project of RM111.9 million in the financial year ended 31 December 2016. In the event there is any future recovery from the insurance claims, a partial reversal of the impairment will be recognised then.

 

This announcement is dated 10 April 2017.






Announcement Info

Company Name MUDAJAYA GROUP BERHAD
Stock Name MUDAJYA
Date Announced 10 Apr 2017
Category General Announcement for PLC
Reference Number GA1-10042017-00068




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