GSS Energy faces S$12m write-off with termination of associate’s agreement
Wong Pei Ting
CATALIST-LISTED precision engineering firm GSS Energy’s associate company PT Sarana GSS Trembul (PT SGT) failed to fulfil obligations of a work programme amounting to US$6.4 million by a September deadline, causing its co-operative agreement to be terminated.
In a bourse filing on Wednesday (Dec 28), GSS Energy said the agreement’s termination will affect the recoverability of the group’s S$2.8 million investment in GSS Energy Trembul Limited (GETL), and a S$9.9 million sum due from GETL and PT SGT. The amounts were calculated based on the latest unaudited financial statements for the financial period ended Jun 30, 2022.
GSS Energy holds a 20 per cent stake in GETL, which in turn holds 49 per cent of PT SGT.
No income has been generated under the agreement, which was entered into on Nov 2, 2016 with PT Pertamina, for the Trembul Operating Area. The agreement was meant to last 15 years.
GSS Energy said an appeal is pending, but if it is not successful by Dec 31, the group would have to write off or impair the amounts in the accounts for the financial year ending Dec 31, which would place a material impact on its net tangible assets (NTA).
Assuming the termination was on Dec 31, 2021, the pro forma financial effects on the group’s NTA would be S$51 million, down from S$63.6 million before the termination.
Correspondingly, the pro forma financial effects on the group’s earnings per share, after tax, would be -1.18 Singapore cents, down from 0.82 cent.
Trading of GSS Energy shares has been halted since Dec 23, pending the release of this announcement.
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