Contractor sues troubled Johor oil terminal after rescue bid fails
KUALA LUMPUR, Sept 3 — The managing contractor of the insolvent Asian Petroleum Hub (APH) in Johor, once billed as one of the world’s largest fully integrated oil terminals, is suing the project’s receivers, financiers and owners, said main contractor Muhibbah Engineering Berhad (MEB) — who are also named in the suit — in a filing today with Bursa Malaysia.
Others named in the suit filed by ZAQ Construction Sdn Bhd are CIMB, APH, and Lim San Peen (the receiver and manager appointed by CIMB over APH).
“ZAQ is alleging MEB’s involvement in the restructuring scheme proposed by the receiver and manager in January 2012 vis-à-vis the APH Project, and thereby indicating its support for such proposed scheme. The proposed restructuring scheme was subsequently called off by the Receiver due to withdrawal of support by CIMB in end June 2012,” the filing stated.
ZAQ is seeking damages against all the defendants. No amount was specified in the suit.
MEB said it was of the view that the claim brought by ZAQ is “frivolous and the company will defend the case.”
It was reported in June that CIMB had withdrawn its backing for the project’s restructuring.
APH was placed under receivership in January and CIMB had appointed PricewaterhouseCoopers to oversee the restructuring.
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 facility, 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.
Financier CIMB had placed APH under receivership last year over a RM1.4 billion three-year bridge loan granted in 2006.
APH drew down RM840 million but costs had escalated. The firm tried unsuccessfully to look for investors for a further RM2 billion in new financing.
More than four years ago, the Cabinet decided that Seaport Terminal, a private company controlled by tycoon Tan Sri Syed Mokhtar Albukhary, should be allowed to take up a 35 per cent stake in the project. The tussle between Seaport and KIC has yet to be resolved.