1. Introduction

The Board of Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) is pleased to announce that its wholly-owned and major subsidiary, Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) has recently entered into a subcontract to build an offshore substation (OSS) high voltage direct current (HVDC) platform consisting of topside and jacket (Subcontract) from Petrofac International (UAE) LLC (Petrofac). This significant contract, valued at approximately RM1.5 billion, underscores MHB's commitment to clean energy infrastructure development.

The consent from the relevant Parties, for MHB to release the Subcontract information to Bursa Malaysia Securities Berhad was obtained on 31 May 2024. 

2. Salient Terms

The Subcontract scope consists of construction engineering, fabrication, mechanical completion, load out and sea fastening, and architectural works on engineering, procurement and construction (EPC) basis. 

This OSS platform will comprise a topside, weighing approximately 30,000 tonnes (including equipment) and a jacket, weighing approximately 10,000 tonnes. The duration of the Subcontract is approximately 36 months with fabrication to begin in 2025 and completed by 2028. 

In addition, MMHE and Petrofac will collaborate towards the possibility of another OSS of similar size. 

3. Financial Effect

The Subcontract will not have any effect on the share capital and shareholding structure of MHB. The Subcontract is expected to contribute positively to the earnings and net assets per share of MHB for the financial year ending 31 December 2025 and beyond up to the completion of the Subcontract. 

4. Risks

The success of the Subcontract might be affected by various risk factors. These factors include execution risks, weather conditions, and any operational and commercial impacts that may result from political and economic uncertainties at both local and global levels, as well as the impact of pandemics or other endemic diseases. MMHE has considered the risks and developed mitigation plans to ensure the successful execution of the Subcontract.  

5. Director’s and Major Shareholders’ Interest

None of the directors or major shareholders of MHB or people connected to them has any interest, direct or indirect, in the Subcontract. 

6. Directors' Statement

The Board of Directors of MHB, after considering all the aspects of the Subcontract, is of the opinion that the acceptance of the Subcontract is in the best interests of MHB. 

This announcement is dated 4 June 2024.