Annica Holdings said a customer of 60 per cent subsidiary Industrial Power Technology is terminating a contract for a biomass power plant in Malaysia.
Annica, an oil and gas equipment supplier and industrial plant contractor, said FTJ Bio Power Sdn Bhd sent a notice of termination that alleged breach and default by Industrial Power of certain terms of the engineering, procurement, construction and commissioning contract.
Annica said Industrial Power has already completed the engineering, procurement and construction portion of the contract and has been paid up to about 90 per cent of the original contract sum of RM87 million (S$32.35 million).
Industrial Power will "vigorously object" to the FTJ claims and will initiate arbitration proceedings if it cannot reach an amicable resolution with FTJ, Annica stated.
Annica shares closed at half a Singapore cent on Friday before the announcement.