CIMB backs out of APH restructuring
KUALA LUMPUR, June 26 — The Asian Petroleum Hub (APH) in Johor that was once billed as one of the world’s largest fully integrated oil terminals has run into more difficulties as its main financier CIMB has apparently pulled its backing for the project’s restructuring.
APH was placed under receivership in January and CIMB had appointed PricewaterhouseCoopers to oversee the restructuring.
One of the main contractors for APH, Muhibbah Engineering Bhd, announced today that it had received news of CIMB withdrawing their support for the proposed restructuring.
“Further to our previous announcements made in respect of the Asia Petroleum Hub Sdn Bhd (“APH”) Project, we wish to update that our legal advisers have been informed by CIMB Bank Berhad (“the Bank”) that the Bank has withdrawn their support in respect of the proposed scheme to restructure APH, which was filed previously by the Receiver and Manager (of PricewaterhouseCoopers) appointed by the Bank,” it said in a statement to Bursa Malaysia. “The Company is currently evaluating various courses of action and solutions. Further development will be updated accordingly.”
APH had awarded Muhibbah the contracts for marine piling and jetty work worth RM820 million.
It also reportedly owes CIMB some RM840 million, which was part of a RM1.4-billion bridging loan facility provided to the project back in 2006.
As part of the earlier proposed settlement, the current shareholders of APH — KIC Oil & Gas (90 per cent stake) and UMNO-linked Trek Perintis (10 per cent) — had agreed to surrender their equity holdings, although it was not clear if they received financial compensation.
APH was designed with a storage capacity of 924,000 cubic metres and large trans-shipment capacity, and is located on a 40-ha reclaimed island off the coast of Johor.
RHB Research Institute said in a February report that APH was to be completed in 2009 but was now only 60 per cent complete following delays as the soil on the island was found to be unsuitable to be built on.