You are here
ST Engineering to pay US$18m to customer in US arbitration proceedings
SINGAPORE Technologies (ST) Engineering's US marine subsidiary has been ordered following arbitration proceedings to pay US$18 million to a customer.
Consequently, it would make a further provision of about S$14.2 million in the financial statements for the period ended Sept 30 as an adjusting subsequent event.
The mainboard-listed integrated engineering group announced in a regulatory filing on Wednesday that its wholly-owned subsidiary VT Halter Marine had been embroiled in issues and disputes arising from a 2011 vessel construction deal for the design and construction of certain vessels for Hornbeck Offshore Services.
Hornbeck had claimed damages totalling approximately US$48.7 million, mainly on the basis that the vessels constructed by VT Halter Marine had errors in design and construction. VT Halter Marine had in the arbitration proceedings made counterclaims against Hornbeck for approximately US$2.4 million.
Hornbeck was awarded US$18 million on Oct 22 after the arbitration panel found in its favour while VT Halter Marine was awarded US$2.1 million for its counterclaims.
The net amount payable to Hornbeck is therefore US$15.9 million, and ST Engineering had made provision of about S$7.5 million in respect of this dispute in the past. Hence, it would further provide for S$14.2 million in the financial statements for the period ended Sept 30 as an adjusting subsequent event.
The company said: "The arbitration award is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year."
ST Engineering shares ended at S$3.89 on Wednesday, down two Singapore cents or 0.51 per cent.